Ken Davy  

FCA needs to strip away some of the rulebook

Ken Davy

Ken Davy

According to legend, Lady Godiva rode naked through the streets of Coventry to save the peasants from the oppressive taxation imposed on them by her authoritarian husband.

Substitute oppressive taxation for ‘regulation’, and her Ladyship for the ‘Coventry Building Society’, and you have the modern-day version of this heart-warming legend.

I am not suggesting Mark Parsons, the plain-speaking chief executive of the Coventry, is likely to be donning his riding boots any time soon.

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Nonetheless, when announcing the society’s excellent results he rightly highlighted the important part played by intermediaries in the achievement of the building society’s strong growth.

Nor is he alone in recognising the vital importance advisers continue to play in ensuring consumers have access to quality advice and good outcomes. Time and again, research has shown clients who have financial advice enjoy greater financial security.

Their mortgages are more efficient, they accumulate significantly greater savings over their lifetime and their families are safeguarded by the ‘miracles’ of life insurance and critical illness protection.

We can all be proud of the undoubted and widely recognised success of financial advisers in serving clients and ensuring consumers achieve better outcomes.

Unfortunately, all too often, this success is achieved against a background of rules and regulations that while in some instances are very necessary, are often, like Lady Godiva’s husband, unduly oppressive.

When this happens, the effect is counterproductive as far as enabling the regulator to achieve its objective of improved consumer outcomes.

It cannot be a good outcome for consumers that after some 30 years of regulation, the adviser community has been reduced to only about 10 per cent of the size it was when regulation was first introduced.

The regulator needs to note the comments of the chief executive of the Coventry Building Society, and the many others who recognise the important role of intermediaries in delivering better outcomes to consumers.

I urge the Financial Conduct Authority to focus some effort on what it can do to improve consumer outcomes by cutting back on regulation.

Instead of always increasing regulation, let us start to strip out some of the rulebook while leaving Lady Godiva’s stripping exploits to legend.

Ken Davy is group chairman of SimplyBiz