Regulatory Framework And Government Policy
Regulation and legislation has virtually always been with us but since identifying the need to control the financial services sector and afford investor protection its introduction has continued unabated. The Friendly Societies Act 1992 further prescribed the responsibilities of management committees and management alike. The emergence of authorities to regulate the retail side of the business has demanded further resource requirements as well as imposing a financial cost.
We cannot nor should we necessarily expect regulation to decrease and the consolidation of regulation under the Financial Services Authority brought with it additional demands and costs. We have met these demands and always strive to contain the costs.
Fiscal policies of successive Governments provided friendly societies with some valuable advantages over our commercial competitors but in recent years these have been eroded. A failure to increase the tax-exempt contribution limits to keep pace either with inflation or wages has significantly reduced what advantage we had. Throughout this time new initiatives have been launched to encourage individuals to save with the aim of easing the burden of state welfare provision – TESSAs, PEPs and ISAs – whilst largely ignoring the valuable traditional service that we can provide. We shall continue to support the Association of Friendly Societies in its efforts to restore these differentials.
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