It is conference season across Europe, and at the time of writing I am preparing to speak at the Convention of Independent Financial Advisors conference in Monaco on 22 to 24 April.
In the UK, the retail distribution review has been around so long that its dangers have been discounted by many. In Europe, RDR offers some very serious new dangers which really worry advisers – hence the conference invitations.
UK IFAs are used to being the dominant distribution, with 60 per cent of the market. Most European IFAs are the minority distribution, with banks and/or insurance companies taking the majority of the action. As a result, their trade associations are in a perpetual battle with their big battalions who try to use EU directives and capital adequacy provisions to keep independent advisers in check.
FECIF, the European IFA trade association which is hosting one of the CIFA conference days, fully understands that all its members must work together. European regulators are working in concert to increase their power and influence and we must work in concert to stop the EU and the big battalions from taking over.
Sadly the UK main market is not represented at FECIF. This is because the UK market, the largest single adviser market in Europe, has historically been seen as the leader of the pack and a testing ground for new regulation.
Generally most of FECIF’s representative effort is based on attempting to shape incoming directives. Each directive has to attempt to create one system which regulates insurance-based French distribution, with the bank-based German market and the adviser-based UK. Inevitably the result is confused and slow.
The FCA has ignored this confusion by developing its own policies – which are nearly always more than the EU would like – and then challenging the EU to follow it. For instance, Mifid II is a cause for worry in the rest of Europe but in the UK, with the exception of recording interviews, most of this directive is already part of our regulation and a load more besides. Indeed Mifid II represents deregulation for the UK market.
So this week not only do I have to explain the excesses of RDR to the conference but also apologise that the UK has been the weak link in the chain.
The UK’s IFAs must regain our pride, and with it our position in Europe as leader of the pack.
Garry Heath is editor of the Heath Report
