The Financial Conduct Authority should conduct a “thorough review” of its handbook for advisers and streamline it to clear up what is expected of them, the Association of Professional Financial Advisers said.
Chris Hannant, Apfa director general, told FTAdviser that at present, if printed, the FCA handbook would stack up to eight foot worth of A4 sheets. “The one thing the regulator could really do…I think it needs a thorough review of its handbook.
“If it wants to encourage innovation, if it wants to allow people to do things [it should review it], just in terms of streamlining it.
Mr Hannant said: “I know there’s a lot of European legislation requirements in there where it’s gold plated… you shouldn’t have a rule book that is eight foot high. How can anyone read that?
“It’s a ridiculous notion - they should be able to do it in a much more efficient fashion.”
However, Mr Hannant was clear that the idea of reducing the handbook was not about reducing standards, but about making what is expected of advisers clearer and more easily accessible.
“It’s not about reducing standards it’s just about making it comprehensible and less prescriptive.
“I think it could be slimmer and, as a consequence, more effective. I’ve had conversations with people at the FCA who recognise this and they say they have been in other regulatory environments where the rule books are a fraction of what could fit in a single folder.
“Obviously financial services is quite complex and I’m not sure if it can get that far…but I think if you are trying to get people to do something, clarity over what you want them to do is important otherwise you will get people confused.
Mr Hannant added: “A rule book of that complexity doesn’t meet that clarity test so its no wonder people struggle to understand what is expected of them.
“If it is that long, then something is wrong, and if you are trying to get someone to do something you have to be clear about what it is. An eight foot pile of paper isn’t clear.”
