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FSA pledges to stop 'hiding behind consultation papers'

by Michelle Abrego on Nov 15, 2012 at 08:03

FSA pledges to stop 'hiding behind consultation papers'

The Financial Services Authority (FSA) has admitted to shortcomings in its communications with firms and has pledged that successor the Financial Conduct Authority (FCA) will not ‘hide behind consultation papers’.

FSA head of asset management Edward Harley said that the FCA would adopt a more open and accountable approach, speaking at the Tax Incentivised Saving Association (Tisa) conference.

‘A general point is that we as an organisation have not been the best at communicating, we haven’t been as creative as we can about getting out messages to firms and consumers,’ he said. ‘I think a very important part of the FCA is about getting out and talking [to firms and consumers].

‘We don’t want to hide behind consultation papers. We want to talk to firms more... we’d like to have fewer of them [consultation papers] and for them to be more concise.’

Harley added that the FCA board would ensure staff remuneration was kept in line with performance.

‘We want to show a clearer link between our fees - the fees you pay us - and the work that we do,’ he said. ‘As a regulator this will mean engaging more with organisations like Tisa and we’d like you to work with us to make that a reality.’

19 comments so far. Why not have your say?


Nov 15, 2012 at 08:54

"...We want to talk to firms more... we’d like to have fewer of them [firms] ...."

There, I've fixed the misquote for you.

In seriousness, the FSA / FCA need to go on a plain English course, and along with the CII etc, common terminology needs to be used.

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Adam Wareing

Nov 15, 2012 at 08:59

The FCA is making all the right noises. Let's wait and see...

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Chris Miller

Nov 15, 2012 at 09:16

Now that the FSA's Blizkreig is is pretty much worked through, and the stamping on all forms of resistance is complete, they belatedly start to make the right sort of noises.

I think we can all recognise this guff for what it is.

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Arthur Schopenhauer

Nov 15, 2012 at 09:20

Contradictions are a result of too many rules and too few definitions At the PFS why no FSA speaker main platform confirming the RDR success and with some up to date impact assessment

THE FCA will have no problem being more open and accountable as we have a vary low hurdle rate

"Tax Incentivised Saving Association (Tisa)" Who are they?

Can we have clarity on EIS SEIS &VCT why are some regarded as UCIS?

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Julian Stevens

Nov 15, 2012 at 09:20

Notable by its absence, though, is any undertaking to publish for all to see and to debate in open forum all and any responses to future consultation papers. It's all very well to talk about making its consultations more concise and about being "more creative" (whatever that might mean) about getting out messages to firms and consumers. But if the FSA's consultations continue to be little more than statements of intent, the outcomes of which are foregone conclusions, with the FSA claiming merely to have "taken on board" (a favoured expression of Sheila Nicoll) the feedback it's received, then nothing will have changed. Talking to and engaging with firms is all very well, it all sounds very democratic, but what really matters is whether or not the people at the FSA will actually listen to and act upon what people say to them.

A classic example of a potentially bad outcome as a result of the FSA NOT listening to or acting upon what industry representatives have tried to tell it is its obdurate stance over commission from legacy products. A common objection from providers in respect of many older products has been that the costs of converting their systems to accommodate adviser charging are completely disproportionate to any anticipated future business inflows. But the FSA has refused to negotiate, so providers have been left with no choice other than to stop paying commission on them (and that commission won't be folded back into the product by way of an enhancement), with no adviser charging option.

Why has the FSA not been prepared to countenance Customer Agreed Commission in respect of commission generated by top-ups to legacy products and for any excess to be rebated directly to the client? That surely would meet the spirit, if not the absolute letter, of the RDR? But no, we're the FSA, this is what we've decided and you (the providers) will just have to conform, even if it will actually be disadvantageous to customers who might, with good reason, wish to top up those legacy products.

The FSA likes to talk grandly about improving cultures throughout the industry and the achievement of better consumer outcomes, but what is also required is a change of culture within the FSA itself to help the industry to achieve those objectives. This latest wishy-washy statement of intent doesn't indicate that that's about to happen. Actions speak louder than words.

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Philip Melville

Nov 15, 2012 at 09:38

More importantly the FSA have steadfastly refused to consult on the problems that I have with leaves at this time of the year

Everybody knows that they are responsible but I still have to clear my drive myself at my own expense .

Although I admit that I dont yet need to do a suitability letter on which rake I use so they cant be all that bad.

Perhaps I can sue the rake manufacturers for not properly explaining which one is for what because I surely cannot be expected to have any part in this dilemma.

My wife thinks we need a gardener with Level 6 qualifications who will be able to sort things properly.

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One is afraid

Nov 15, 2012 at 09:47

Call me cyninical but all these "we want to help / embrace / work closely / support / be more open and accountable / be less fierce type statements only ever seem to be spouted at singular gatherings. For instance, this latest "stop hiding...." emanated from TISA conference, recently we saw similar 'pledges' at IFP conference etc.

My point is that when the last bottle of wine has been polished off and all the providers giveaways are hoovered up, such statements also seem to be left behind.. Do we have to be members of certaiin societies or attenders of annual bunfights to have such messages addressed to us mere mortals. In this case were it not for this article the great majority of us would have had no idea of the FSA pledges, thoughts or intentions.

I can only request that if there is any semblance of reality in these statements can they please be directed to ALL relevant parties through the correct universal channels.

It is not until then (in my opinion) will the Adviser community take such such intent seriously

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Rich Douglas

Nov 15, 2012 at 09:50

Seen as they're exactly the same staff, albeit within a 'different' organisation, I can't see why they couldn't be open and communicate better now

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James Marchant

Nov 15, 2012 at 09:50

@Philip absolutely brilliant, that really made me smile!

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Jonathan Kirby

Nov 15, 2012 at 10:13

To misquote from Hamlet:

"The FSA doth protest too much, methinks."

The phrase has come to mean that one can "insist so passionately about something not being true that people suspect the opposite of what one is saying."

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Arthur Schopenhauer

Nov 15, 2012 at 10:24

The problem is that you only get one chance to make a first impression We already have the impression

To be positive about it IF they could persuade someone like Ken Day to have some say and they actually listened to him then they might regain the trust of the advisers

The public have no idea who they are at least they wont be confused with the Food Standards Association

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Nov 15, 2012 at 11:55

Let's wait and see, maybe our comments about please, thank you instead of the constant threats have hit a nerve.

May be now they will when asked by advisers/companies do requested visits and reviews.

I have asked for a visit as I want to know we are getting it right. We have been direct for two years and I would prefer to know at this stage if we have any problems, not 10 years down the line.

The guidelines are so week and not supported by actual illustrations or examples of what is good or bad. We need a true guide that holds both parties accountable and unable to use respect or hindsight. This would also help with the PI, as this in my opinion part of the problem, along with no legal long stop. If the uncertainty of retrospective action could be removed it would help both the adviser and the consumer.

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Jonathan Kirby

Nov 15, 2012 at 13:29

@ MartinIFA

You are a brave man!

A friend of mine a few years back was unfortunate enough to run over a dog in a local village and as it had no name tag, did the decent thing and went to the 'village bobby' and reported it.

Unfortunately, unbeknownst to him, his MOT had run out two days earlier and, despite the car passing with no issues needing attending to, he was fined for driving without an up to date certificate.

I just hope you don't end up in a similar situation if you get your visit!

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Simon Kershaw

Nov 15, 2012 at 13:32

I do not believe that the FSA took notice of a single response to a consultation paper. Not one.

Therein lies the main failure of this regulator. It has had its collective head up its collective arse for 12 years.

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Michael Brown

Nov 15, 2012 at 14:04

@ Philip

Wives are usually right.

I suggest you get one ASAP before they are all gone to other people!

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Julian Stevens

Nov 15, 2012 at 14:21

The problem, I think, (well, one of the problems) with the attiitude of the FSA is that because what it sees primariiy are bad practices and not much of the much greater proportion of good practices, it has assumed that the entire industry is rotten from top to bottom.

Hence we have a regulatory structure based on the lowest common denominator and objections to any changes proposed by the FSA are regarded as being based solely on self-interest, resistance to change and to adapt and a dogged determination to cling to the bad old ways of the past.

The FSA is free to continue to formulate its policies according to this mindset for the simple reason that no body exists to make it do otherwise. There seems to be a collective denial amongst the TSC that such a document as the Statutory Code of Practice For Regulators even exists, much less that it [the TSC] ought to be making at least some effort to hold the FSA to account for totally ignoring it. And this, despite the fact that Pat McFadden, who wrote (or at least put his name to) the foreward to the bloody thing, is now a member of the TSC. Should not he, of all people, be seeking its enforcement? Or should not a few of his parliamentary collegues be seeking to hold HIM to account for making no effort whatsoever to hold the FSA account for ignoring it?

Not even AIFA ~ of whose best endeavours I'm usually fairly supportive ~ seems to have the balls to raise the issue. The Code should be the very cornerstone of AIFA's struggle on behaldf of its membership against regulatory injustice yet nothing is being done to make use of it. Why not?

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Nov 15, 2012 at 14:23

Jonathan, I know and agree with you. That said, I would only have two years of problems to sort. We try very hard to make sure we are doing everything we can to get our documentation, attitude to risk and compliance are correct.

Every day you see companies and individuals being closed and fined, with reasons being stated their systems were not robust enough. My point is I do not have an actual example of what is good or bad. I believe I am doing a good job, but how do I know.

I see little point in paying a third party as they will not be liable when the regulator eventually does come to visit.

Whilst there is a big danger, I would prefer to have it from the horse’s mouth that we are getting it right or wrong.

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Julian Stevens

Nov 15, 2012 at 14:49

None of us knows exactly what the regulator requires us to do and, if we did, we'd probably go bust trying to conform to it all because the FSA hasn't the faintest clue about (or concern for) the commercial need for compromise and to do simply the best you reasonably and honestly can within the resources available to you.

But, should your name be pulled out of the mud bucket and you're selected for a compliance visit, you can be fairly certain that the men from the FSA will find wrong with your business however much they want to and hammer you accordingly. Be afraid, be very afraid.

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Philip Melville

Nov 15, 2012 at 17:28

@ Michael Brown,

I do have a wife thanks - Jean MacIntyre - an extremely capable adviser who shares the running of our business with me and who also shares my enthusiasm for our industry.

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