FAMR reveals FCA as all talk, no action

It is, rightly, respected around the world for its ‘without fear or favour’ journalism, it decided early that it should expect people to pay for its online offering, and the fish and chips in the canteen every Friday always set me up for the weekend.

But – there was always going to be a but – it does occasionally get bogged down with bureaucracy.

It is not unique in this affliction. Once any company gets to a certain size, a corresponding amount of red tape becomes inevitable.

A company that comprises three people in a room can be dynamic. Someone can have an idea in the morning, act on it in the afternoon and be making money by the next day. If it is not making money, it can be pulled just as quickly while everyone moves on to the next idea.

The trouble is, this entrepreneurial spirit generally leads to success, which leads to expansion.

Maintaining any dynamism through the transition from small company to big is arguably a greater challenge than getting big in the first place.

A big organisation will, by definition, have more people who need to justify their jobs by being involved.

More people who will want to contribute or say no. Suddenly, ideas need processes and focus groups and getting anything done within a year is a challenge.

Many years ago, my organisation recognised this problem and came up with a solution, the ‘JFDI’ committee.

I think it stood for ‘just flipping do it’, it was something like that anyway. The idea was that you could take an idea to this select group of entrepreneurially minded people and they would fast-track it, without the need to resort to all the various layers of approval that would otherwise afflict it.

The management then were very pleased with this solution. I, on the other hand, could not get past the farcical realisation that the only way they could think of to cut bureaucracy was to create a committee.

Even if it had an edgy acronym in front of its name, all it did was introduce another layer of admin.

It is a strange irony to find yourselves so exasperated by corporate bureaucracy that you are impelled to do something to combat it, yet so in thrall to it that all you can do is create more bureaucracy.

I was reminded of this as I read through the key recommendations of the Financial Advice Market Review (Famr), the long awaited document with which the FCA would use months of consultation to outline its framework for overhauling UK financial advice.

In fact, all it outlined was more consultation.

Every other page of the 85 that made up the review seemed to be announcing a further review, whether on the definition of advice, time limits on attaining qualifications, cross-subsidisation, clarity of factfinds, or rules of thumb and nudges, whatever that means.

But for all the ‘consulting’ or ‘exploring’, there was very little actual doing.

As far as I could see, the only major thing the regulator did pass judgement on was its repeated refusal to introduce a long-stop.

No consultation on this one, just an outright rejection of the idea that advisers should ever be allowed to retire in peace without the fear of some retrospective claim arriving.

I disagree with lots that the regulator has done, but I can usually see why it has done it. The argument against a long-stop is that it is protecting consumer interests, but the downside is it creates a culture of fear among advisers who can literally never leave the industry.

The regulator seems too scared to actually do anything beyond calling more reviews. Jon Cudby

Like Al Pacino in Carlito’s Way, desperately trying to shake off his past as the mob keeps trying to pull him back in.

Whatever. I suppose we should be grateful for this anomalous incident of decision. The rest of the review was littered with issues on which the FCA opted to delay judgement. I don’t know why.

It may be that the regulator has been emasculated by a controlling chancellor, who seems to be intent on driving through big changes himself.

It may be that the whole organisation has developed a culture that means it is so reliant on the consultation process that it can’t countenance actually achieving anything.

It enjoys the journey so much that it makes it as laborious as possible rather than actually arriving anywhere.

Either way, the regulator seems too scared to actually do anything beyond calling more reviews. And then reviews of those reviews. I for one wish they would just flipping do it.