I know this is hard to believe, but I haven’t always been the easy-going, supremely cheerful, endlessly availing soul everyone rightly sees me as today. In the past, given what I felt was due cause, I could actually be quite cantankerous.
Take my battle with what I perceived to be the dark forces of a compliance team. This happened many years ago, and it’s only right that I preserve the anonymity of the other parties to protect the innocent.
The problem essentially boiled down to frustration. I gradually became convinced that the team was doing everything in its power not to support me. I was sure all my efforts to grow my business were being needlessly thwarted.
I eventually became so irked – even paranoid, you might think – that I complained to the company’s managing director. He gallantly endured my griping, paused for a moment and then asked: “Andrew, have you ever considered that the issue might be you?”
He was right. The members of the compliance team were simply doing what they had to do. It was yours truly who was letting the side down – principally by failing to recognise there are some things you just have to put up with.
In many ways, this is how we should all feel about regulation. We may find almost relentless interference from the Financial Conduct Authority (FCA) and its fellow meddlers exasperating, but the reality is that we’re well and truly stuck with it.
Take Consumer Duty, in whose lengthy shadow we’ve all lived for nearly a year now. As I’ve stressed before, I’m not saying it’s an unremittingly bad thing – but much of it is certainly in the tradition of pen-pushers compelling us to do stuff we ought to be doing already.
After all, should we really treat the notion of ensuring “good outcomes” as some kind of radical innovation? I don’t think so. Anyone who works in financial services and doesn’t strive for good outcomes shouldn’t be in the industry in the first place.
Yet maybe we should try to frame this another way. Perhaps we should welcome Consumer Duty with open arms if it somehow serves to root out those who aren’t committed to – or even capable of – delivering good outcomes.
Viewed in this light, such an edict becomes rather more than yet another unwanted administrative burden dreamt up by bureaucrats who apparently have nothing better to do. It becomes an opportunity for the best advisers to benefit from the survival of the fittest.
Why? Because regulation that has a Darwinian edge drives out underperformers, which in turn creates a client surplus – and those able to make the cut are free to plug the resulting “advice gap”.
More broadly, it’s sometimes useful to imagine what our industry might look like if regulators favoured a more light-touch approach. On balance, I think it’s safe to say the picture would be pretty dire.
At best, we might find ourselves back where we were 30 or 40 years ago, when more than 200,000 “independent insurance brokers” – to use the preferred term of that unruly era – were given leeway to work their particular kind of magic. At worst, we would have a full-blown Wild West scenario.
Don’t get me wrong – I know only too well that a slew of ever-shifting demands and requirements is a significant source of unhappiness. I know advisers believe they’re afforded practically no time to adopt and adapt to one set of changes before another is unveiled.
I also know regulation can play a big part in undermining advisers’ confidence and credibility. I know it can seriously eat into precious time and resources. And I know it can even confuse clients and damage their trust.
So let’s not get carried away here. I’m not saying we should start every day by logging on to the FCA’s website, surveying the Regulatory Initiatives Grid and rejoicing in the prospect of many more years of box-ticking, form-filling, I-dotting, T-crossing and jumping through assorted hoops.
I’m also not setting myself up as an apologist for the numerous ideas, “improvements” and impositions that are genuinely unhelpful. I make no bones about the fact that many are wasteful, unnecessary and sometimes plain daft.
In the end, though, we need to treat regulation as what I call a “tolerable barrier”. Yes, it annoys us and maybe even hinders us – like that compliance team back in the day – but we’re lumbered with it, so why not eke out some positives?
The chances are we’ll feel better about our lot in life if we accept resistance is futile and learn to grin and bear the whims of the powers that be. Above all, we’ll feel better if we appreciate that regulation – at least every now and then – might just be to our advantage.
Andrew Goodwin is co-founder and CEO of Truly Independent and the author of ‘The Happy Financial Adviser’.
