Time to move on from Hectoring and RDR resentment

While I’ve often used this column to engage in verbose vituperative concerning the regulator, or to highlight its apparent wilful ignorance of advisory concerns and the corollary consumer consequences, today I’m going to speak out against some of the vitriol directed their way.

More specifically, I’m speaking out against the torrent of abuse that has been flung afresh at the adviser sector’s favourite hate figure, Sir Hector William Hepburn Sants.

This summer it will be two years since Sir Hector (FT house style demands I include the honorific) stepped down from his post as chief executive of the then Financial Services Authority. He’d have actually left in 2010 were it not for the persuasive intervention of Treasury officials keen for him to stay and see through the bifurcation of the old regulator, but that is another story.

Having been head of the UK’s financial watchdog for five years - and a senior figure for eight - he remains, to a degree, newsworthy. So I was not surprised when a couple of the nationals carried the relatively innocuous story this week that Sir Hector is being considered to head up a Church of England taskforce on lending.

And why wouldn’t they want him? He’s had a 37-year career in financial services and has been on both sides of the regulatory divide. He knows his onions, that’s for sure.

In truth the Church of England angle in the wake of Archbishop of Canterbury Justin Welby’s well publicised and populist campaign against payday lenders - not to mention the embarrassing revelation days later that it had indirect investments in just such a lender - is probably the key reason the Daily Mail and Daily Telegraph news editors allocated a precious few column inches.

I was even less surprised to see a few of our competitors copying the piece for their own news output. To trade publishers he’s a useful headline device to generate clicks. Our industry’s number one pantomime villain.

Sir Hector is a useful headline device to generate clicks - our industry’s number one pantomime villain.

We decided not to follow it up; partly because we have a policy not to run a story unless we get the information directly, but mostly because it just felt like we’d be doing little more than goading a negative response.

If that was the intention, boy did it work. Advisers flocked to share their views, which were, almost without exeption, excoriating personal attacks on the fragile knight. The poor chap has only just recovered from the stress that presaged his departure from his role as Barclays’ compliance director in September.

Joking aside, we’ve seen this outrage expressed in our comment boards in the past and it often makes for uncomfortable reading. In one case a little more than a year ago when RDR wounds were fresher, one commentator even indirectly called for Sir Hector to be hanged. Even allowing for the usual comment board hyperbole, I inhaled through gritted teeth when I read that.

I am acutely aware of the resentment that exists in the adviser sector - and I am sympathetic, believe me. Mistakes were certainly made on Sants’ watch.

We all now know that the FSA did not model the effects of the drop in advisers would have on mainstream consumers. There is a consensus view that it also got the new binary breakdown of adviser models very wrong - a view that based on some candid remarks earlier this week its successor may be beginning to accept.

And Sir Hector himself didn’t do his reputation any favours when he was forced to apologise to the Treasury Select Committee after being flippant about the potential drop in adviser numbers in 2010 Nor when he had to do so again in 2012 after the FSA embargoed a dismissal of TSC demands to soften the RDR cliff edge to coincide with publication of the report itself.

But this is all old news.

We’re through the looking glass on RDR. In reality, most firms would probably say things could certainly be worse: FCA data show non-bank adviser numbers creeping up and revenues rising, something our own anecdotal evidence would affirm.

Issues undoubtedly remain, such as the advice gap. But rectifying this is going to involve ingenuity and effort from the adviser community, many members of which still seem to be devoting a disproportionate amount of time angrily mourning the loss of the old pre-RDR regime.

Those advisers that are getting on with things are the ones coming up with new ideas and models: like the firms that have launched new online propositions aimed at small pot clients in the past couple of weeks based on low, flat-rate fees or free initial guidance.

I’m not exactly suggesting we all ‘forgive and forget’, merely that we all move on.