Could dealer groups become regulators?

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Handing some regulatory responsibilities to dealer groups would help to streamline processes, says Camelot Group’s Peter Cave.

Monday, June 10th 2013, 7:34AM 5 Comments

by Susan Edmunds

It has been suggested that the Financial Markets Authority’s expanding remit could lead it to delegate some monitoring duties to dealer groups in the same way it deals with QFEs.

Cave said he planned to talk to Code Committee for Authorised Financial Advisers chair David Ireland about the idea.

“There’s a missing link in the current structure.”

He said Camelot had looked at the idea of becoming a QFE when the regulation first took effect.

But it would have meant being held to the same standards as big organisations such as AMP and ANZ, he said. “Was it really a track we wanted to go down?”

But he said there was value in the idea of a solution for smaller groups, such as Camelot, which has 33 adviser members.

Managing infrastructure for those advisers as individual AFAs was much more work-intensive than providing compliant systems for the Camelot advisers as a group, he said.

Six or seven Camelot advisers had been audited by the FMA, he said. If the group were operating in QFE-style, the systems would only have to be checked once.

“It would be good to be able to say ‘this is the Camelot process’.”

Loan Market chief executive David Hart said he had not heard the idea but would be open to discussing the possibility.

But consultant David Whyte said the suggestion was outrageous.

“I can’t see [FMA chief executive] Sean Hughes being comfortable delegating responsibility of that nature.”

He said dealer groups were little more than aggregators these days. “They are in no way in loco parentis of the regulator… it would be a dangerous path to go down.”

Britain’s attempts at professional bodies charged with monitoring had been a failure, he said.

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