View from City Road: Slow but sure is the best route for the PIA

The juggernaut that is the Personal Investment Authority may be missing a wheel or two but it seems virtually unstoppable. Even strong opponents such as Standard Life see little option other than to apply to join the new investor protection agency.

Yet it is just as clear that many believe the PIA to be unworkable. BAT Industries, the owner of Allied Dunbar and Eagle Star, yesterday predicted that the PIA's flaws will be quickly exposed and that the whole investor protection system will have to be reviewed again within two or three years.

This is surely madness. If a thing's worth doing, it's worth doing well. It is plain stupid to go along with the botched compromise of the PIA just to get the matter out of the way, rather than spend the additional months necessary to find a solution that has the broad support of both consumers and the industry.

The companies that have voiced reservations about the PIA - BAT, Standard Life, Prudential Corporation, Halifax Building Society - are not two-bit operators with reputations for ripping off the public. With other less public refuseniks, this means the PIA lacks the willing support of perhaps 40 or 50 per cent of the financial services industry, including many of its best-respected firms. And the PIA is still supposed to be a self-regulating organisation.

The easy response to the critics is that they are defending their own self-interest. But since they couch their criticism in terms of doubting whether the PIA will deliver the much-vaunted step change in regulatory standards, and are generally in favour of a move towards statutory regulation, it is right to wonder whether there is not rather more to it than that.

The Securities and Investments Board is keen to see the PIA established as soon as possible. As Martin Broughton, BAT's chief executive, pointed out, this has meant that financial advisers are going to have to plough through the paperwork in the run-up to the end of the tax year on 5 April, traditionally the busiest time of their year. This is typical of the cack-handed way in which the PIA has been handled.

For all the talk of a step change, improvements in standards and greater public confidence will only emerge gradually. There is no sense accepting a hurried and muddled compromise.