Tyrie vs FSA, round two: Wheatley wins by knockout
FSA managing director boxed clever to neutralise committee objections and floor internecine RDR debate for good.
Seconds out, round two.
The heavyweight debate over the consequences of the Retail Distribution Review was recommenced by Treasury Select Committee chairman Andrew Tyrie earlier this summer in an exchange with Financial Services Authority managing director Martin Wheatley, according to letters published last week by the committee.
This time, however, the result was far more emphatic.
Last year the TSC came out of its corner swinging in the opening round of hostilities, publishing a report into the RDR that responded to the ululations of a section of the adviser community and that hit some sore spots in relation to the regulatory package.
Thus it demanded that the FSA review its absolutist position with regard to grandfathering by offering case-by-case exemptions for some advisers from the new qualifications requirements.
Perhaps more controversially, it proposed that the FSA ditch its existing timetable and delay the implementation of the rules by a year to prevent a cliff-edge deadline precipitating the demise of a number of advisers to the detriment of their clients.
Set against the plaintive arguments of a minority, Wheatley’s considered response strikes right at the heart of hollow demands for an RDR extension
The regulator responded with what many saw as a low-blow. The report from the TSC, which was released to the press two days ahead of its publication under embargo, was preemptively countered by a rebuttal from the FSA also released under embargo on the same day.
The discursive brawl that ensued saw Tyrie brand the regulator’s response as “peremptory” and “unacceptable” and culminated in an embarrassing climbdown for its chief executive Hector Sants, who apologised to the TSC in person and said that the response was “clumsily worded” and did not reflect his commitment to full accountability.
But while he may have returned to his corner following the exchange with his nose blooded, significantly the FSA emphasised throughout its commitment to the RDR timetable and prescriptive qualifications rules. Honours were effectively even.
That really should have been that, but TSC chair Andrew Tyrie does not throw in the towel so easily.
In June of this year Mr Tyrie again wrote to the FSA on the subject of the RDR, this time to the managing director in its conduct unit Martin Wheatley, who is also the chief executive designate of incoming conduct regulator the Financial Conduct Authority.
In the letter Mr Tyrie reveals that the TSC is still nursing wounds from the earlier exchange, referencing its earlier calls for changes to the rules and repeating the distaste that was felt at the FSA’s “disappointing response”.