View from City Road: Hard road ahead for the PIA

At some stage over the next few days the Securities and Investments Board, with the full backing of the Treasury, is expected to formally recognise the Personal Investment Authority as regulator for the savings industry. An announcement will be made early next week and both Joe Palmer and Colette Bowe, chairman and chief executive respectively, will be able to breath a sigh of relief.

Neither, however, can expect the controversy which has dogged the PIA since its inception, to abate. There remains one prominent refusnik - the Prudential - a number of prominent don't knows - including Standard Life, Allied Dunbar, Lloyds Bank and Barclays - as well as around 3,000 small independent financial advisers (IFAs), who have so far failed to sign up.

The Pru probably never will, such is its intransigence, preferring instead to be regulated directly by the SIB. Ms Bowe is hoping the others will fall into line; in the end it is hard to see they have much choice other than to pack their bags and close shop. Many IFAs remain highly exercised not only about the extra cost of the PIA (at least 20 per cent more than existing arrangements), but also about the whole idea of being regulated under the same roof as their direct competitors, the banks and the captive sales forces of the big life companies. Many fear the PIA will become the creature of the banks and blackball them.

Some of these worries are legitimate, others exaggerated, but for the time being Ms Bow deserves support in her efforts to bring in a tougher approach on monitoring and disclosure in the marketing of personal savings as well as higher standards of qualifying competence. Certainly, the industry needs it after the scandals of recent years. If anyone can pull it off, Ms Bowe can. The road is fraught with dangers, however.