A change of regulator
George Osborne’s Mansion House speech included confirmation that the Financial Services Authority (FSA) is being abolished.
Osborne confirmed that the FSA will effectively be split in two – part moving to the Bank of England to handle prudential regulation and part forming a new Consumer Protection and Markets Authority (CPMA).
These changes will be completed by 2012.
This is broadly in line with the Conservative manifesto promise. It brings to an end months of uncertainty at the FSA about their future, although we imagine that personnel there will still be concerned about their jobs.
What does it mean for Informed Choice and our clients?
Well, it means the year after next we will need to update all of our stationary and marketing material with the details of a new regulator! We will need to tell our clients in the future that “Informed Choice Ltd is authorised and regulated by the Consumer Protection and Markets Authority”.
What this announcement does not mean is that the Retail Distribution Review (RDR) has been scrapped.
The Policy Statement containing the new rules on charging for advice and independence was published in March this year. The process for implementing the RDR will simply be handed over to the CPMA.
It will be interesting to see over the next few months (and in fact today, when Mark Hoban presents more detail to Parliament) what this transition will look like and what impact it will have, if any, on the way in which we conduct business.
In particular, we will be looking for answers to who will oversee our compliance with prudential requirements, who will be funding the new regulator and if this signals a bigger move away from rules towards principles.
It does bring to an end the hypothetical question we have been asking ourselves for years – if the regulatory did not exist, would we do anything differently?
The end of one regulator and the emergence of another will not change anything in terms of our client centric approach to the delivery of advice, fair charging structure and emphasis on the value of higher level professional qualifications.