The law of unintended consequences usually applies because of ignorance (it is impossible to anticipate everything, thereby leading to incomplete analysis).
Which brings me to Sir Callum McCarthy’s infamous Gleneagles speech, which laid the groundwork for the overhaul of the retail distribution business model now known as RDR. Sir Callum catalogued a legacy of failings in the retail distribution environment, slamming product providers, intermediaries and regulators alike for failing to implement a fair and profitable system.
But what about the law of unintended consequences? Did he really anticipate the evolution of his idea to embrace platform developments; rebates; clean share classes; bundled and unbundled charging; adviser ‘propositions’; decimation of adviser numbers; closure of bancassurers; legacy issues and sunset clauses? I would like to think probably not. However, it is worth considering the costs (real and perceived) of all this and more to realise his vision.
However, there is no real need to worry about the costs because the law of unintended consequences tells us that this is all the by-product of his ignorance – he never meant it in the first place.
Philip D Stevenson
Chartered Financial Planner
ARK Financial Planning
Stalybridge
Cheshire
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