Mr Fassam said one had to remember that with the original FAMR, the government’s hands were “tied” because of Mifid II and that directive’s definitions of advice.
But post-Brexit, he said: “There is an opportunity for us to change our rules to suit the UK market so we can think much more broadly about what the right advice market is, for the specifics of the UK market.”
According to the trade bodies, the debates over rising regulatory fees and advisers’ contributions towards the Financial Services Compensation Scheme are only part of the wider problem – that of a “broken system” of regulation that allows more and more consumers to end up falling into the FSCS.
They therefore urged advisers taking part in Financial Adviser’s Keep Fees Fair campaign to broaden their letters out from focusing just on fees onto the wider financial services marketplace, the scope of regulation in the UK and making it work better for consumers.
While the government makes policies that determine the scope of regulation, the government does not set budgets – only the FCA does, which is why some advisers have found their letters on fee hikes have been pushed back by the Treasury.
Gemma Harle, managing director of Quilter Financial Planning, warned that “reviews often focus on the known problems rather than solving the difficult ones, so said it was absolutely key the scope of any review remained fixed on what Mr Richards had proposed”.
Ms Harle urged this to be done with “pace or the market will contract and access to advice will be very restricted”.
This comes as the regulator has seemingly thought again about the way the FSCS is funded and drawn upon.
Back in June, the message from the chairman of the FCA, Charles Randell, was very much that fees would rise and that restructuring the FSCS levy would be too complicated and could take years to do.
But in the intervening three months, coinciding with Financial Adviser’s Keep Fees Fair letter-writing campaign to the Treasury, constituency MPs, the regulators and the select committees, the FCA has issued a call for input on the consumer investments market. That document reiterated that the regulator did not think the time was right to reassess funding structures. At the same time, it did moot the idea of whether polluters could pay more towards redress before a claim has to reach the FSCS.
‘Polluter pays’ is one of the solutions proposed by letter-writers, alongside proposals for a product levy and a market-wide assets-based levy.
However, in its public meeting last week, and the related press conference, outgoing interim chief executive Chris Woolard ruled out a product levy.