It has been another week of regulatory revelations, senior figures sounding off and rumours of consolidation within the industry.
If you were stuck under a rock during the last five days, then here is a handy round-up of what went on:
1) A stay of Mifid execution
The European Commission finally caved to industry pressure this week and confirmed the second iteration of its Markets in Financial Instruments Directive would be delayed by a year, now due to be rolled out across member states in January 2018.
Trade bodies and regulators welcomed the extra time to get their houses in order, but were also quick to warn that firms should not become complacent.
“Despite the delay, firms need to continue to press ahead with their implementation work,” responded the Financial Conduct Authority. “There is still a lot for them to do to be ready in time for the new implementation date.”
Meanwhile, just this morning the FCA revealed it is working with associations, academics and lenders to overhaul the CeMap qualification for new entrants to the mortgage intermediary market, with a consultation paper due in the summer.
Association of Mortgage Intermediaries chief executive Robert Sinclair explained the regulator is not currently looking to change the qualification from its current level three standing, rather it wants a reflection of the modern mortgage market, taking into account new legislative and tax changes.
2) Sticking it to the man
The FCA was also active this week in dishing out punishment, this time on a personal level to a banker involved in the ‘London Whale’ case.
Achilles Macris, the former head of JPMorgan’s CIO International, was told to pay £792,900 for failing to inform the FCA about concerns with his Synthetic Credit Portfolio, following a whopping £137.6m for his former employers a few years back.
Following in the footsteps of Keydata’s Stewart Ford, Mr Macris hit back at the regulator, accusing it of wasting public money and significantly damaging his reputation and career.
“The FCA has had several opportunities to admit its mistakes, but instead, at every turn, it has until now sought to defend and justify its position, wasting public funds,” he stated. “I remain profoundly concerned about how the FCA, and in particular its enforcement staff, has acted.”
3) Bigwigs make a stand
Speaking on the Today programme on Wednesday (10 February), former Financial Services Authority chairman Lord Adair Turner laid into the peer to peer industry, stating that losses on such lending will “make the worst bankers look like absolute lending geniuses”.
He accused the fledgling industry of lacking proper credit analysis and underwriting, which provoked a strong comeback from market participants.
Christian Faes, co-founder of LendInvest, hit back: “These comments are self-serving and timed to drum up more sales of Lord Turner’s book on Amazon. Surely he is conflicted too, given that he’s now regulator-turned-banker himself.”
Our editor compared the situation to buying alcoholic ice creams for kids - it makes sense; promise.
4) Ombudsman makes headlines again
Exclusive data released by the Financial Ombudsman Service exposed the extent to which complaints against advisers are made via ambulance chasing claims management companies.
During the last calendar year, the ombudsman received 2,707 complaints about financial advisers.
Of these, 494 - or 18 per cent - were brought by a consumer with a CMC representing them.
This followed last week’s news that leading CMC Rebus had filed for administration, something which one of its peers took as evidence that the industry was struggling to make the move from simple PPI complaints up to more complex advice mis-selling claims.
Elsewhere, Robert Morris, a partner at law firm RPC, disputed claims the Fos made inconsistent decisions over the liability of networks and their appointed representatives.
He disagreed with Regulatory Legal’s Tobias Haynes, who last month accused the ombudsman of making “arbitrary” decisions over networks being held responsible for advice given by their appointed representatives.
Much debate ensued, which can be viewed in full here.
We couldn’t let a week go by without covering another Fos decision and this time it concerned Positive Solutions being told to repay a client who complained after he did not hear from his adviser for more than a year.
Again, all the details are here.
5) Speculation still rife
A week later and still Cofunds remains in Legal & General’s hands - but that won’t stop people proposing where a deal might come from.
The latest suggestion was that Aegon plans to double down on rumours that it is up for sale, by boosting its economies of scale by snapping up Legal & General’s platform business.
Lang Cat founder Mark Polson made a convincing case, pointing out that: “It is clear how the advised business would fit into Aegon UK’s model and you could see how the retail D2C would work.”
peter.walker@ft.com
