There is one easy answer as to why Martin Wheatley is leaving the Financial Conduct Authority (FCA) and it is that debacle of the closed life office book inquiry that never really happened.
It is perhaps not so much the ill-advised press briefing that sealed the chief executive’s fate as the failure to clarify the situation for six hours after the initial stories were published, which played havoc with insurers’ share prices.
It handed a brilliant opportunity to insurers, already under intense pressure because of the pension reforms, to lash out at the establishment.
Still, no doubt the city PRs who helped whip up the storm and see off any meaningful FCA inquiry got themselves nice wee bonuses.
Mr Wheatley therefore has a mixed record, but maybe that is inevitable. He made some injudicious remarks about shooting first and asking questions later.
The Retail Distribution Review juggernaut continued on its way, but it would have been much better if Wheatley had injected a renewed concern for preserving as much of the advice infrastructure as possible.
However, he did improve supervision structures rather than relying on enforcement.
He successfully clamped down on those ghouls who were preying on the poor, those rich men running the payday loan companies. He also took on some of the bigger financial institutions, and, from a purely investment advice point of view, that is surely a good thing after years of neglect.
Intriguingly, some of the more bullish right-wing commentators and some influential Tory MPs believe we will see a new appointee who will usher in an end to ‘bank bashing’ and introduce more of a competition- and market-based approach to financial services.
Advisers should ask the new man or woman to help them serve their clients better with sensible reformsYet before everyone gets too excited, I would argue that Wheatley, admittedly in a weak field, has been among the most successful people in the role since this sort of regulation was conceived. That may partly be because other Bank of England-based regulatory institutions are now looking out for the next crisis, and the Bank has much stronger powers to cool the mortgage market too.
Still, at least Wheatley didn’t lose a dozen banks on his watch, nor indeed run an organisation that was so obsessed with advisers that it forgot just about everything else in the market.
He may also have put in place a structure that helps avoid future nasty surprises like Arch Cru and Keydata. For that, investment advisers may be grateful one day.
I suspect, however, that a lot of city institutions will want a new era of lighter if not quite ‘light-touch’ regulation.
Personally, I think advisers should keep a little distance from the investment banking, private equity and hedge fund lobbies. Advisers should ask the new man or woman to help them serve their clients better with sensible reforms: shrinking the rule book where it can be made clearer, bringing in a long stop, and overhauling the compensation scheme. Advisers have waited long enough for these changes.
Indeed, a successor who was actually tasked with a bonfire of the regulations might not actually be in the interests of the professional advice sector.
John Lappin writes on industry issues at www.themoneydebate.co.uk
