Weekend Essay: Are Regulations Inspiring or Passion Killing?

My husband Dan and I have been watching the former BBC Life on Mars drama series and its sequel Ashes to Ashes for the past few weeks. We had heard that the writers had just finished the script for a sequel called Lazarus, so we wanted to remember the story so far.

For those of you who didn’t see them when they first aired, both series follow modern day police officers who are seriously injured while on duty. These officers are likely either in a coma or dying in the real world, but wake up doing their jobs in Manchester in the 1970s and London in the 1980s respectively.

Current policing practices and ethics contrast with those you see on classic British TV shows like The Sweeney, where it is perfectly acceptable for officers to use violence and intimidation to achieve results.

Modern detectives Sam Tyler and Alex Drake lock down and eventually rub off on their brutal, sexist, and homophobic boss, DCI Gene Hunt. Hunt is an enigma until the end because you never really know if he’s one of the good guys or the bad guys.

I’m too young to know what real police looked like in the 1970s. But when I was a kid in the early 1980s, I saw a policeman break up a street fight and then use the toe of his boot to force a young man into the back of a police van. It wasn’t a kick – the young man was throwing himself like a child throwing a tantrum, so the officer had to do something. But it still looked harsh – enough for my grandmother to notice to my mother. It didn’t fit the image of the cheerful policeman who visited my school.

Society is different now because the rules we have are stricter. To give a silly example, the Spirograph children’s toy now comes with Blu-Tack to hold the drawing stencils in place. In the 1980s, mine came with sharp, couture-style metal pins. My kids can’t believe the lack of health and safety back then, but I’ve never been hurt by those pins. However, what was once acceptable is no longer acceptable, and that is exactly the point made about regulation in Life on Mars and Ashes to Ashes.

The characters of Gene Hunt – aka ‘the Guv’ – and his nemesis, DCI Jim Keats of Scotland Yard’s Discipline and Complaints department, raise some interesting points about professional ethics. Does trying to change the status quo make you a hero because you’ll make things better or a villain because you trample on the good of what you already have? Does professional integrity always come first, even if strict non-compliance produces the fairest outcome? And what do you do if the culture and rules allow bad apples to hide under a respectable facade?

I mention all of this not because I’m thrilled to have actors Philip Glenister and John Simm reprising their roles as Hunt and Tyler – although I am. It’s just that I looked into the Consumer Duty offered by the FCA, as I host a podcast series on the subject with Royal London. And my TV trip to the past got me thinking about rules and regulations in a broader sense than the roughly 240-page document I skimmed through on the FCA website. Depending on your perspective, financial services regulation is either inspirational, pie in the sky, or just more red tape to get in your way.

One of the things that struck me about the FCA’s consumer duty feedback paper was how it paints a beautiful picture of the financial services system it would like to see – one where everyone benefits from higher standards of consumer protection in retail markets.

The vision is of companies competing to meet consumer needs and regularly measuring their performance in terms of consumer outcomes. The reasoning is that this should encourage innovation, as it is in every business’ interest to stay ahead of the pack and treat customers well to keep them happy. The only way for consumer confidence and confidence in financial services is upwards. What’s not to like?

When I was reading this, John Lennon’s Imagine was spinning in my head thanks to my kids’ fixation with all the Beatles. But to me, the summary page of the document I had read was like the FCA version of those lyrics.

It’s inspiring because it shows that there is another path at hand if everyone does their part and works together for the common good. That said, do these ideas tend to play out as exactly as expected?

There may be consultations and feasibility studies in advance, but effectiveness is still uncertain until there is full implementation or at least a pilot project. This is when flaws and unintended consequences come to light, with additional regulation often required to resolve them.

I think that’s why some people are starting to get bogged down by it all. They see themselves unable to move or breathe without permission or without justifying everything they do. But does that mean we should stop looking for the ideal? Even if the vision isn’t working completely as expected, it’s probably better to be halfway there than not bothering to improve things at all.

Regulation can inspire people to do better, but it can also kill advisors’ passion for their work. Can you ever have the first without the second?

Going back to Life on Mars for a moment, there’s a scene where Sam Tyler briefly returns to the present and is sitting in a meeting room with various other professionals. Everyone is dressed and booted, with no room for the battered leather jacket Tyler wears as part of Hunt’s team.

It’s the antithesis of his experience in 1973 – you know, the criminals that “the Guv” would have locked up in a cell are probably having fun while committee-civilized policing unwinds over coffee. But you also know that Tyler – who is an innovative force for good in the parallel universe of the 1970s – is a product of this seemingly sterile environment, so it’s not as black and white as it seems.

Asked about the ethics of keeping someone in custody for 48 hours without formal charge in violent cases where mental health reports might be required, Tyler’s answer is empty. He cuts his finger and says he doesn’t feel it, but you know he’s referring to the job, not his injury.

It’s as if the layers of regulation and political correctness have made the job meaningless for him. Without passion for what it has become, Tyler takes extreme measures to return to 1973 where his colleagues are in a dangerous situation, making “good” police.

I wonder if advisers, especially those who have been in the profession for a long time, can relate to Tyler when faced with the latest wave of ideas coming from the regulator. I know how frustrated they can feel when new rules are introduced for everyone, rather than targeted, tougher measures for those who cause trouble and break existing rules.

Over time, this can cause advisors to lose interest in their profession. Some counselors told me that they discouraged their children from following in their footsteps because “the aggravation wasn’t worth it.” This is not what we want when we try to encourage more young people to enter the profession.

But we all need evolving rules and limits – I don’t think anyone would seriously suggest that regulation is a one-time event. Even though most people are doing the right thing, it’s comforting to have structures and processes to underpin what it looks like in a changing world.

It’s kind of like being a parent – the rules and boundaries show that you care about them and that you’re a responsible parent, not a neglectful parent who lets their kids do whatever they want. But at the same time, a parent’s job is not to crush all of their children’s independence and creativity so that they never function as well-adjusted adults. There is a balance to be found which changes as the child grows and it is not easy to achieve.

After thinking deeply about this, I think rules and regulations only become a problem when they make everything so prescriptive that there’s no room for autonomy – when conforming means becoming the same.

I’m not saying the FCA is perfect and I know some small business advisors feel micromanaged by it. But I never see him wanting to create Stepford Wives-style consulting firms that are rigidly conforming clones of each other.

For starters, it doesn’t align with the vision of innovation and competition set out in the Consumer Duty proposals. At this stage at least – final proposals are not expected until the end of July – the regulator seems to want companies to be different from each other, but consistent in their treatment of customers.

I have a friend who works for the FCA and he sent me the web link to a recent speech on technology and regulation given by Jessica Rusu, FCA’s Head of Data and Intelligence, at the Money event 20/20 in Amsterdam. In this keynote, Rusu discusses how innovation and technology are transforming financial services, which means the regulator must also change and be innovative in its approach.

She points to the FCA’s two-day CryptoSprint event, held in May, as an example of how the regulator is “willing to experiment with new approaches to policy discussions focused on sharing ideas. and proposing solutions in an agile and inclusive way”. .

This event provided an open forum where academics joined people from the regulatory, technology, and financial services industries to discuss various issues regarding the crypto markets. Not being present at the event myself, I have no idea of ​​its productivity. I hope it has nothing to do with Sam Tyler’s board meeting.

I like the idea of ​​everyone from a variety of fields participating, because you can learn a lot from people with different experiences, perspectives and approaches – as long as you’re willing to listen and act on what you hear.

One of the things I didn’t like about the consumer obligation feedback report was how some respondents’ concerns about things like effective competition in the interests of consumers were addressed. Some respondents expressed concern that the cost of increased regulation could bankrupt some companies and make the market less competitive, not more competitive. But the FCA disagreed and just pushed it back, reiterating what the proposed rules are intended to do.

I don’t think it’s unreasonable to worry about the financial implications of the proposed regulations given that the cost of everything else is rising in the current environment. But if the FCA says that going forward it’s ready to really listen to those it invites to its discussion tables, maybe there really is a chance that the regulations will be inspirational and achieve great things.