FECIF - The European Federation of Financial Advisers and Financial Intermediaries

Editorial - June 2017

David CharletDavid Charlet

Europe as financial advisers see it.

A long time ago, the European Union used to be a place for the production of coal and steel. Nowadays, it seems to be a global Union far more engaged than the US with our jobs and other matters. Consider: in the US no would find “passports” for advisors (no right to act in another State, just the one in which you obtained your licence if you are a broker or advisor). This is quite different to the European situation.

That fact is, in theory, fantastic, but where are the fundamental common rules and why are we faced with so many projects, documents and regulations?

In a normal world, when humans decide to create a unified place or project, they define which people will be in charge for decisions on constitutions, acts and law but not in the EU.

Few if any of the citizens are aware of this but if we call Europe a “country” of 27 individual countries with a Parliament and another chamber, the EU Council, we need to realise that neither of these can decide unless they are in agreement. Amusingly, ask a European citizen who is defining their laws and they will respond that the EC is the boss and decides what happens!

In a normal world when you decide a new law, you conclude it and wait before defining new legislation on the same topic (in a perfect world preferably not within 2 years to allow sufficient time for relevant parties to adapt to it); but … in the EU you can have 3 pieces of legislation dealing with the same topic, discussed all at once!

In a normal world, when you, a citizen, elect representatives, you expect them to be in charge of voting what may be the rules that affect your life. But … in the EU, a general text may be voted for by both the European Parliament and European Council and yet, there is the chance, particularly in regulatory matters,  that the result is a highly precise and specific text from the European Commission! Increasingly this will be a text produced through or by an administrative external entity.

In almost every case, the result is  often at least 6 or 7 years of negotiation between numerous stakeholders, frequent and continual arbitration with civil servants, leading to amendments to the citizens’ text and, ultimately, the translation of a Directive (that has to be fully translated and transposed into national laws) into Regulation, which doesn’t necessarily. The result: hundreds and hundreds of pages precisely describing the far fewer previous pages, which it had been supposed were sufficiently clear to become the rules or law in themselves.

In the middle of 2017, we are proud to see a new picture of what advisers are in Europe but we are also continuously negotiating the IDD text (“D” for Directive – supposedly free transposition to national rules)  plus one of the 4 declinations of it as “Regulatory texts” (including enforcing measures) and the forthcoming debate on Fintech, which is expected to represent a clever debate but could be one that is only partly focused and realistic if we, the representatives for the relevant firms, whether human or techno, are not heard and listened to.

Having said this, and on behalf of those I represent, I may ask the EC and our ESAs to remain reasonable and to work in the interests of the majority and our common market. For once we now have, in my opinion, a truly pro-European French President, I therefore hope that Europe will be able to define some simple rules, aiming for matters to be managed in a more normal way.

Our 650,000 advisors, hundreds of thousands of firms, the employed public and millions of consumers all over Europe are expecting it.

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