Member Article

Financial services regulation: is it working?

“As Amercian as Mom, Apple Pie and Baseball”, a phrase often heard to describe something that is unique to the culture and society in which you live and work, illustrating principles or values with which few disagree.

They say that in democracies, the people get the governments they deserve.

Is it now the case that in financial services, regulation has delivered the outcome consumers deserve?

The following were a selection of recent trade press headlines and I am fast beginning to despair about the image that this industry has, who is responsible for that and if regulation wishes to see the death of the smaller adviser firm – and in turn the demise of itself as its cost becomes financially unsustainable.

• Martin Wheatley: Judgment-based regulation is here to stay
• Martin Wheatley: FCA is a ‘very different animal’
• Wheatley: Structured products are like ‘spread bets on steroids’
• FCA chief Martin Wheatley warns of higher regulatory costs
• MM Wheatley interview: Bad consumer outcomes will see RDR revisited
• FSA reveals its latest executive pay and bonuses
• Advisers need to project positive image
• Complaints Commissioner rebukes FSA for withholding information

AMI boss, Robert Sinclair is on record as saying that “We need a new deal where the FCA commits to no more money. We also need them to consider where they really should be directing their attention.”

The bad in the industry needs to be removed but the time has come for the regulator to consider the impact that statements like those above have on consumers and those they regulate, in particular small adviser businesses.

As Sinclair said “We need recognition that most intermediaries live in the communities they work in. They advise people they see at school, in their pub, at the sports club and in the supermarket every week. They are not out to do bad things to their neighbours.

“They do routinely act in the customers’ best interests. We need a regulator who can incorporate that into their risk models and factor it into their work.

“Finally, we need a new contract where they operate within a constrained budget by really addressing the real risks, not imagined ones”.

The UK financial services industry is unique to the culture and society in which we operate and financial advisers in a post RDR world, as well as in the pre, continue to illustrate the very best of principles and values with which few disagree…few that is, except the regulator.

This was posted in Bdaily's Members' News section by Panacea Adviser .