Opinion  

Young upstart sets out to fight aggressive regulation

Young upstart sets out to fight aggressive regulation

No doubt you will have noticed a new adviser trade body has been launched with Garry Heath at the helm. Libertatem will seek, among other things, to make regulation and regulators much more accountable to parliament.

He believes there is a unique opportunity to influence the new government. Or, as he puts it: “Now we have a majority Conservative government, we have a golden opportunity to return accountability to regulation, to cut its costs and its intrusiveness, and to ensure the maximum number of advisers are available to the broadest section of society.”

It is the final phrase that should get some traction, given the widely acknowledged need to disseminate advice about investments and pensions to more people.

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The announcement continues: “In any new government there is a short period in which new ideas can gain traction and so it is important advisers join Libertatem now, so we can demonstrate industry support in our discussions with government and regulators.”

Mr Heath says this is not all about the RDR but instead bringing accountability to regulation, which will bring better regulation.

He also believes Apfa is dominated by networks and a few nationals – with the network business model clearly in some peril – rather than the wider and particularly directly authorised adviser population.

Libertatem will be much more responsive and indeed democratic, he says.

Of course, I wouldn’t take an entirely dim view of Aifa/Apfa’s work historically. It has taken a ‘softly softly’ approach, much to the frustration of advisers, but one has to ask how successful another tack would have been given the government of the day’s narrow interpretation of where consumers’ interests lay.

Aifa in particular managed to divert the course of the RDR away from one that massively favoured bancassurance.

But if that was realpolitik at the time, there may indeed be a rationale for a change of tack now.

So could it work? Well, for a long time it has felt as if the requirements of the RDR, and indeed the financial requirements of regulation overall, have meant that rule after rule and invoice after invoice have been heaped on advisers. This has been a long and slow process that began with the election of New Labour in 1997 and the creation of the FSA soon after.

But at least some of those established habits, including expecting advisers to contribute financially to just about every new bit of regulatory and ‘advice/guidance’ infrastructure, continued under the coalition.

Looking back over the past two decades, one can see that it has been almost always one-way traffic.

There has also been a narrow definition of consumer interest that has rarely, if ever, factored in access to advice.

Practically, a stay of execution for trail feels like a big ask. A new central system allowing advisers to be remunerated upfront but without bias is intriguing, but challenging. It needs to be designed with the investor/retiree right at the heart of any new system.