Bowe quits PIA in regulatory shake-up

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The Independent Online
The Government's drive to overhaul the policing of the financial services industry claimed its most senior scalp yesterday as Colette Bowe, chief executive at the Personal Investment Authority, one of the leading regulators, announced her resignation.

Ms Bowe said she had decided not to apply for any of the senior posts on offer at the new financial watchdog, NewRO, into which all her own organisation's functions will be merged. She will step down from her position at the PIA, which regulates retail financial services, at the turn of the new year.

Her resignation comes at a time when NewRO, the super-regulator announced by the Chancellor of the Exchequer, Gordon Brown, soon after the May general election, has already been interviewing candidates for many of the available posts.

Ms Bowe said: "I have hugely enjoyed the challenge of PIA. A great deal remains to be done to conclude the pensions review and to take forward the work we have started here on training and competence and disclosure."

Critics of Ms Bowe claimed that her refusal to apply for a new post was almost certainly the result of an understanding on her part that she would not have been offered a suitable job.

One regulatory source said: "She was given a job to do at the PIA and there are many people, particularly within the Labour Party, who believe she muffed it. She failed to sort out the pension review and ensure compensation to those who were mis-sold personal pensions. Regulation of retail financial services has not been a conspicuous success. Draw your own conclusions."

Bernard Jones, chairman of the IFA Association, which represents many financial advisers in the PIA, said: "I think her days were numbered from the moment the new Government decided it was going to create a super-regulator. They made it clear they were dissatisfied with the existing state of regulation."

This view was strongly rejected by a PIA spokeswoman: "Colette Bowe has been a chief executive and in charge of the entire show for almost four years. The NewRO jobs were far more compartmentalised and simply did not offer enough of a challenge." Treasury sources also said they "did not recognise" the criticisms of Ms Bowe's effectiveness or suggestions that she had been edged out.

Joe Palmer, PIA chairman, said: "I wish to express our warmest thanks to Colette for getting the PIA up and running and making it an effective force in the field of retail financial services regulation. Her knowledge and string leadership has been greatly appreciated."

NewRO is headed by Howard Davies, a former deputy governor of the Bank of England. Its core will be formed by the existing Securities and Investment Board (SIB), the senior City watchdog, which takes on the functions of all the other regulators, including the PIA. Mr Davies said: "We are sorry she has decided not to apply and wish her well in her future career."

Among those who are believed to have been interviewed by Saxton Bampfylde, a firm of recruitment consultants, for senior posts at NewRO are Phillip Thorpe, chief executive at Imro, the fund manager's watchdog, and Richard Farrant, chief executive at the Securities and Futures Authority, the stockbrokers' regulator. An announcement is expected next week.

Ms Bowe, 50, has been at PIA since January 1994. Before then, she spent five years at SIB, where she was in charge of retail regulation.

Prior to becoming a financial regulator, Ms Bowe spent 11 years at the Department of Trade and Industry, where she was accused of leaking documents criticising the then Defence Minister, Michael Heseltine, for his role in the Westland helicopter affair.

PIA sources suggested that part of Ms Bowe's concerns, prompting her decision not to apply for a job, may have been over the nature of the way the super-regulator will conduct its work.

In place of division heads responsible for every aspect of the regulation of their members, a so-called "vertical" approach, functions will be split "horizontally". Senior executives will be expected to take charge only of one aspect of regulation rather than everything affecting a member.

PIA sources suggested that Ms Bowe may have felt she would be unable to see through any aspect of her former regulator's work. However, Ms Bowe is also known to have been the private butt of scathing comments by several senior Labour politicians about her abilities as PIA chief executive.

Helen Liddell, the new Treasury Minister, recently read the riot act to top insurance companies over pensions mis-selling. The PIA deadline for resolving compensation cases was December 1995, but by last May, barely 10 per cent of the ``urgent'' 550,000 cases had been dealt with.

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