Savings industry criticises latest appointment to the FSA

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The Independent Online
Howard Davies, the chairman of the Financial Services Authority (FSA), has appointed the man behind the decision to launch the mammoth review of mis-sold pensions to be one of the main advisers to the super- regulator's new board. The decision is likely to aggravate a savings industry already smarting about the board's lack of industry representatives.

Michael Blair, the key policy former who led the decision to launch the pension mis-selling review in 1994, was yesterday appointed as the top adviser to the board of directors of the FSA.

The decision to appoint Mr Blair, currently deputy chief executive of the Securities and Investment Board (SIB), drew immediate criticism from a savings industry which privately believes the mis-selling review was the product of a great miscalculation by the regulators.

Industry practitioners said that while Mr Blair was respected as a regulator, his appointment would further alienate practitioners from a new regulator which now had very little top-level input from the industry.

Geoffrey Pointon, a former board member of financial advice regulator Fimbra, said: "Mr Davies has got a major challenge on his hands to show that he is in touch with the industry. Many feel that the review has blighted the industry for too long and now, with politicians getting involved, it is going to continue."

While leading industry figures have accepted the pension review as a necessary evil, many believe that SIB, the FSA's predecessor, failed to calculate the effort required to complete it.

The deadline for completing the review of 90 per cent of the most urgent cases of mis-selling was set in 1994 for 1 January 1996. But during 1995 and 1996 the review became mired in legal disputes and even the most urgent phase is more than two years behind schedule.

The FSA yesterday said preference for the new posts had been given to insiders at the old regulators, although external advisers had been appointed to monitor the recruitment.