A short message: we have a regulatory bubble that needs bursting….

The real identity is lost: the ends and means of the regulation of the transaction have long ceased to be relevant to the retail end user. It is absurd. We have a regulatory bubble that needs bursting.

What are the biggest threats to regulatory change?  Are they the arguments brought forward by the industry that state that small investors will no longer be served and that advisors will switch to looser regulatory regimes (insurance).

No the biggest threats are ignorance, self interest and the regulatory minefield and transaction modus operandi that have been allowed to develop over time.   

Too many people are drawing the definition of the universe of possible outcomes from their own limited knowledge/expertise/experience.   That is the arguments against change are based on a very narrow self interested view of the world. 

We have an awkward imperfect outcome which far too many believe to be an optimal one, or at least a second best one.  In a way the system that has arisen has become too complex for all but a few to comprehend and its complexity is confusing the issue.  

As we attempt to tweak an imperfection all we end up doing is reinforcing its identity (note CRMII, the POS, advisory titles, guidance on leverage, etc).   There are solutions, we just need to work towards them and gradually build up the platforms and supports that can deliver them.  These solutions do however conflict with the interests and cognitive imitations of the status quo.

What we have are the absurd fruits of the human condition in all its glory:  ordered, conflicted, institutionalised imperfection!  Post FDM 2004 initiatives, the transaction and its regulation have been elevated to increasingly higher levels of institutionalised imperfection.   

The real identity is lost: the ends and means of the regulation of the transaction have long ceased to be relevant to the retail end user.   It is absurd.   We have a regulatory bubble that needs bursting

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