Vincent Derudder, chairman of Fecif which represents 200,000 European IFAs, said in a letter sent today (17 May), that he fears a repeat of the problems which have plagued the financial services industry because those who make regulatory decisions are detached from the reality of its implication.
He said: “For years, since the launch of the "Financial Services Action Plan", our 200,000 members have been the target of increasingly binding regulations which are more restrictive for the small financial intermediary than for the multinational bank.
“Thousands of pages of circulars, recommendations, etc. were produced by the European Commission, the various European agencies (ex-CESR, ex-CEIOPS, etc.), the various regulators of all member states without being able to prevent the financial crisis of 2008/2009.
“All of this aimed at protecting the consumer without actually doing so. In a crisis it is the taxpayer, who is also the consumer, who must pay the price of financial or economic crises. This cannot stop us from thinking that the problem is not the absence of regulation, but not enough good regulation.”
He also pointed to a recent survey which found 37% of European consumers use a financial adviser for advice, compared with 30% who go to a bank or insurance company, and hinted that these statistics illustrate the importance of financial advisory representation within the three new boards.
Furthermore, he said that, in a letter dated 15 February, of which International Adviser has seen a copy, the European Commission indicated that there would indeed be financial intermediary representation on the new boards, although this is not now likely to be the case.
In a final plea, Derudder said the matter is a “question of democracy”, that intermediaries are closest to consumers and therefore better armed to represent their interests and that their inclusion in a supervisory body would bring an element of “realism” to the implementation of regulation.
