View from City Road: Better to be inside PIA tent than out

Making rude noises to mask its embarrassment, Standard Life grudgingly slid yesterday into the embrace of the Personal Investment Authority, that unsatisfactory new regulatory body that comes into operation next month.

Standard is the life company that made an open protest earlier this year when Jim Stretton, one of its senior executives, resigned from the PIA board, on the grounds that it was no longer the self-regulating organisation that had been promised.

Standard says it still believes there are too many regulators, with too little focus and accountability, and that it will continue to urge the development of a more focused and accountable regulatory structure.

There have been many proposals over the past two years for tackling the deficiencies of the PIA structure, neither fish nor fowl but an unsatisfactory hybrid of consumer and industry interests.

The best solution was the Prudential's, which was to move to a fully statutory personal investment regulator reporting directly to the Treasury rather than the Securities and Investments Board.

Such a solution is now on hold, at least until after the next election. Most of the critics are joining, even though they believe the present structure will not last for long. Lloyds gave in this week. Allied Dunbar and Halifax may follow. Only the Pru is committed to direct regulation by SIB.

Its analysis was always right, but the time may have come to observe that old Lyndon Johnson saying that it is better to be on the inside of the tent pissing out than the outside pissing in. The Pru should swallow its pride and work on the PIA from the inside. There is no point in sulking.