Monday, June 29, 2009

Stephen King: Who will end this financial insanity? - Stephen King, Business Comment - The Independent

Stephen King: Who will end this financial insanity? - Stephen King, Business Comment - The Independent: "What matters is that the policies of the Bank of England and the Treasury are inextricably linked. UK policy now will work only on a co-operative basis. Until this essential point is recognised, the danger of public squabbles, undermining the credibility of all our economic policy arrangements, remains high. Presumably, George is secretly smiling."



Why do people believe we have an 'independent' regulator when the entire Board is appointed by the Treasury? My solution would be to merge the flaming lot of them into one and call it HM Treasury, no more squabbling and we know exactly where to point the finnger, is that too simple?

Saturday, June 27, 2009

BBC NEWS | Programmes | Moneybox | Watchdog will end commission bias

BBC NEWS | Programmes | Moneybox | Watchdog will end commission bias: "But Jon Pain, the director at the Financial Services Authority in charge of the retail distribution review that will introduce the changes, does not accept that fewer people will get advice.
'I don't think so - it will still give choice to consumers."

We are not the slightest bit interested in what Jon Pain 'thinks', we want hard evidence that this is not anti-competitive behaviour. We predict Mr Pain will be gone long before any damage is done to consumer choice so we implore the Financial Services Authority to listen to us and avoid any future difficulties.

Felix Salmon » Blog Archive » Annals of regulatory incompetence, FSA edition | Blogs |#comment-3324

Felix Salmon » Blog Archive » Annals of regulatory incompetence, FSA edition | Blogs |#comment-3324: "Now forgive me but isn’t the FSA supposed to be operating in the real world in which things are just not about pure mathematics? A world in which risk managers hide risk, moral hazard is rife and magicians do, er, magic. Isn’t that sort of the entire point? If it was all about the maths then we wouldn’t have the FSA, we’d use someone like the EdExcel examiners to give banks marks out of a hundred at the end of term."


Not only are they baffled by tricksters they don’t have a basic grasp of insurance contracts, some insurance broker sold them D&O insurance which supposedly covered them for misfeasance! Last week Turner, or was it Sants?, said providers of payment protection insurance had been treating customers badly by changing the terms of the policy, even my 14 year old daughter recognises that annually renewable insurance can be varied otherwise the whole thing could fall apart when millions of people lose their jobs!

Regulators suffer from myopia, they are not the solution to our probems Mr Obama, they are the cause.

As Thomas Sowell said:

“It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.”


Was it the Ace of Hearts?

Friday, June 26, 2009

Which? calls for consumer voice on FSA board - Which? News

Which? calls for consumer voice on FSA board - Which? News: "'This House notes with concern the dominance of people with a financial services industry background on the board of the Financial Services Authority.'"


Excuse me, but the entire FSA Board is appointed by HM Treasury, yes that means 100% of them. The MPs concerned should know that because they voted for the Financial Services and Markets Bill.

If Which? gets a person on the Board then so should Independent Financial Advisers.

FT.com / UK - FSA to ban commission for advisers

FT.com / UK - FSA to ban commission for advisers: "Investment providers voiced concern that the needs of lower income investors would not be met"

That is a fact.

Savings industry must rebuild trust and the FSA's proposals are a start - Telegraph

Savings industry must rebuild trust and the FSA's proposals are a start - Telegraph: "But consumers need to feel they can trust the savings business, and that has not been the case for many years."

Clients do trust their Independent Financial Advisers, the facts speak for themselves with 80% of the distribution and 3% of complaints of which only 30% are actually upheld. This review is anti-competitive and fails to address the problems associated with target driven direct sales which generate the vast majority of complaints. The regulators are bankers and predictably biased towards their banking friends.

Thursday, June 25, 2009

FSA proposes strict commission rules for financial advisers | Money | guardian.co.uk

FSA proposes strict commission rules for financial advisers | Money | guardian.co.uk: "Jon Pain, managing director of retail markets at the FSA, said: 'The review is about regaining consumer trust and confidence in the retail investment market,"

There are none as deaf as those who don't want to hear!

The only distribution model which is trusted is the Independent Financial Adviser, the public lack confidence in the regulators, the banks and the life offices who have let them down time and again.

These proposals will do nothing for confidence, they will simply remove choice for the mass market.

FT.com / UK - FSA bans commission for advisers

FT.com / UK - FSA bans commission for advisers: "“This is a great day for the consumer,” said Andrew Fisher, chief executive of advice firm Towry Law. “It is a ban on the bribery and corruption that has plagued industry. Misselling driven by commission should now end.”"

Towry Law don't like commission, well that's a recent change of heart!

Tories consider giving City regulation back to Bank - Telegraph

Tories consider giving City regulation back to Bank - Telegraph: "A Conservative government would return responsibility for City regulation back to the Bank of England, it emerged yesterday."

As long as all the foemr BofE employees and their pension scheme are returned and they actually do some regulating then that would be acceptable in principle. However, the many nundreds of these people have already allowed the banking system to fall between the regulatory gaps, would it be any different if they were sent back from whence they came?

FT.com / Columnists / People - Lord Turner: FSA builds stamina

FT.com / Columnists / People - Lord Turner: FSA builds stamina: "The FSA chairman told the Treasury Select Committee that radical regulatory reforms might not take place due to 'exhaustion'."

Oh yes we are exhausted by all the regulatory reform, the pileometer must have gone past Mars by now!

Wednesday, June 24, 2009

Bank tension over regulation shake-up - Times Online

Bank tension over regulation shake-up - Times Online: "He agreed with Conservative MPs on the committee that the system of bank regulation is “a mess”."


Regulation is bust, the only one who is prepared to admit as much is King, it therefore follows that he is unlikely to be consulted. We cannot imagine HM Gov disassembling the FSA, after all it was once held up as a beacon of.... er... well whatever it was designed to do but didn't.

BBC NEWS | Business | Tories eye bank regulation reform

BBC NEWS Business Tories eye bank regulation reform: "And it is unclear is whether the Bank of England would be given responsibility for the health only of big banks, or whether it would also be charged with monitoring and supervising substantial insurers."

The only thing I see as being clear is the fact that nobody knows what to do and nobody wants to carry the infernal can.

FT.com / Columnists / Martin Wolf - Reform of regulation has to start by altering incentives

FT.com / Columnists / Martin Wolf - Reform of regulation has to start by altering incentives: "My answer is, no. The reason for my pessimism is that the crisis has exacerbated the sector’s weaknesses. It is unlikely that envisaged reforms will offset this danger."

Martin Wolf is spot on.

Unless we stop copying the US at evey turn we will not prevent incentives causing chaos.

Tuesday, June 23, 2009

FT.com / UK - Turner goes to bat for ‘whipping boy’ FSA

FT.com / UK - Turner goes to bat for ‘whipping boy’ FSA: "Since the FSA’s creation, the Bank of England has had the responsibility of guarding against systemic risk, but since he became governor Mr King has reduced the number and seniority of staff in the financial stability wing of the Bank."

How can the bank of England guard against anything when it is the Financial Services Authority which holds all the aces and the former BofE staff who regulate banks?

What a shambles!

FT.com / Comment / Opinion - A better way to promote financial stability

FT.com / Comment / Opinion - A better way to promote financial stability: "An unseemly turf battle broke out at the Mansion House last week over who should be in charge of spotting and squelching future threats to financial stability".

I'm sure the FSA's 740 former Bank of England employees would welcome the opprtunity to leave the sinking ship at the Financial Services Authority. Not just for the Kudos but also for the sake of their final salary pension scheme.

But the FSA and its creators at New Labour HM Treasury will resist any dismantling of the 'one stop regulator'.

We should wait until after the election to sort out our discredited regulatory system and the 'gaps' that whole systems can fall through. The current regime is incapable of rational reform.

FT.com / UK - FSA chief fears turf war with Bank

FT.com / UK - FSA chief fears turf war with Bank: "“I am significantly attracted to ideas by [US Treasury secretary Tim] Geithner’s proposals that we should think about not an absolute limit on size, that would be very difficult to achieve, but a sliding scale of capital requirements.”"

Dear Mr Turner, carbon copies of US "ideas" got us into this mess in the first place. If you can't come up with your own ideas this yet more proof supporting my theory that regulation is bust.

Yours faithfully

Evan

Sunday, June 21, 2009

Jill Insley on the mis-selling scandals that won't go away | Money | The Observer

Jill Insley on the mis-selling scandals that won't go away Money The Observer: "Commission is paid by the provider to the adviser - but don't be under any illusions: the money is coming out of your premiums, and can have an enormous effect on what you get when you cash in an investment, pension or policy."

The ABI told HM Treasury as much, it said 40% of all expenses was commission, we proved that it was less than 1.5% over the life of the contract. What did HM Treasury (Angela Eagle) say about that? Nothing!

Evan Owen
The IFA Defence Union
www.ifadu.co.uk

Question of the week: Do we really need a change to the way financial advisers operate? | Money | The Observer

Question of the week: Do we really need a change to the way financial advisers operate? Money The Observer: "The review will have a fundamental impact on how you deal with your IFA, banker, pension provider or stockbroker. But it should not be change for change's sake.
Given the progress the IFA community has made by improving professionalism and levels of trust over the past 10 years, there's a strong argument the regulator should have focused its attention elsewhere".


We couln't agree more, if the FSA had spent more time supervising the banks instead of tinkering with nebulous concepts we might not have been in the mess we see around us today.

Evan Owen
The IFA Defence Union
www.ifadu.co.uk

Insult, injury and self-interest: how financial advisers eroded our trust | Money | The Observer

Insult, injury and self-interest: how financial advisers eroded our trust Money The Observer: "'It has been a long process because it deals with massive, wide-ranging reforms,' says a spokesman for the FSA."

The Retail Distribution Review, or RDR, has missed every target since it first saw light of day.

www.ifadu.co.uk/images/missedtargetsFTadviser.jpg

Evan Owen
The IFA Defence Union

Darling vs King: Blood on the tablecloth - Business Analysis & Features, Business - The Independent

Darling vs King: Blood on the tablecloth - Business Analysis & Features, Business - The Independent: "At the Mansion House dinner in London, the Governor took careful aim; more power to the Bank of England, he cried. But what of the Chancellor? He wants a strengthened FSA. Richard Northedge untangles the Gordian Knot of banking reform"

How many times does this author need to say "strenghthen the FSA not the BofE"?

When the FSA took over the regulation of banks it also inherited 740 BofE staff, their gold-plated pension scheme and their decrepit computers.

They still missed the regulatory gap that the banking system fell through!!

Does it matter where these people shuffle their papers? Would they be more competent in Threadneedle Street than they are at Canary Wharf?

Evan Owen
The IFA Defence Union (IFADU)
www.ifadu.co.uk

Whistleblower accuses watchdog of covering up its racist bully culture | Business | The Observer

Whistleblower accuses watchdog of covering up its racist bully culture Business The Observer: "A culture of racism exists among senior staff at the Financial Services Authority who are described as 'untouchable'.

Hiow much more evidence do we need to prove that the Leviathan is above the law?

How about the issue of Freemasonry?

www.ifadu.co.uk/fsagate.htm

The FSA also hates IFAs! Is nobody safe from this unaccountable private company limited by guarantee?

Evan Owen
The IFA Defence Union
www.ifadu.co.uk

Friday, June 19, 2009

FTAdviser.com - Whistleblower claims FOS adjudicators risk rushing complaints

FTAdviser.com - Whistleblower claims FOS adjudicators risk rushing complaints: "He said: 'The more cases they can close the more they get paid. There is a conflict of interest.'
According to the whistleblower, a complex investment complaint could take an adjudicator as much as a whole week to investigate, while others could take five or six hours, but he stressed that paying on a case-by-case basis introduced 'risk' into the process."


The Financial Ombudsman Service can make awards of up to £100,000 which are unappealable. This is in itself immoral but as many complaints are about advice provided more than two decades ago, how can anyone expect this 'free' service to instill confidence in IFAs?

A radical overhaul is overdue, we can't accept Lord Hunt's report because it wasn't truly independent.

Evan Owen
The IFA Defence Union
www.ifadu.co.uk

Wednesday, June 17, 2009

PATHETIC, INADEQUATE BANKING REGULATIONS NOT TO BLAME, SAYS DARLING - The Daily Mash

PATHETIC, INADEQUATE BANKING REGULATIONS NOT TO BLAME, SAYS DARLING - The Daily Mash: "Economist Bill McKay said: 'The system went into meltdown without any of the regulations being broken at any time whatsoever"

Mind the GAP.

FT.com / UK / Economy & Trade - King tells City change is necessary

FT.com / UK / Economy & Trade - King tells City change is necessary: "“We who work in the financial sector have much to do to regain the trust of those who work outside it,” he warned."

The 'financial sector' is a broad sword, the only trusted element is the Independent Financial Adviser.

Evan Owen
The IFA Defence Union

Sunday, June 14, 2009

FT.com / UK - Banks fear impact of FSA rule changes

FT.com / UK - Banks fear impact of FSA rule changes: "The trade body for banks will tell the Financial Services Authority today that proposed changes to capital and liquidity requirements do not 'strike the right balance'."

If the banks had been more careful the taxpayer would not have needed to bail them out, Angela Knight now presides over a body representing what is now ,to all intents and purposes, the privatised banking system, if she has any long term solutions for our (the taxpayers) terrible situation then she should stop attacking the Financial Services Authority and bring forward some alternatives to what the failed regulators are proposing, allbeit far too late might I add.

The bankers brought all this upon themselves because they lost their way, what chance is there of them returning to their roots?

Evan Owen
The IFA Defence Union
www.ifadu.co.uk

FT.com / FTfm / Regulation and governance - Calling on Joe Public to help fix regulatory system

FT.com / FTfm / Regulation and governance - Calling on Joe Public to help fix regulatory system: "The UK’s Financial Services Authority takes the biscuit in this respect, with 11 of 13 board members coming from the financial services industry."

Mick McAteer needs to consider that ALL, yes I did say ALL, the FSA Board members are appointed by HM Treasury so any representations he makes should be aimed at the government rather than the financial services industry which has NO say in how supervision should work.

We have had over two decades of regulatory tome and we are numb after the barrage of legislation, enough is enough. It is time for someone to listen to people who have some good ideas rather than a need to protect a fancy salary.

Evan Owen
The IFA Defence Union
www.ifadu.co.uk

Thursday, June 11, 2009

MPs claim FSA misled Select Committee over Iceland - Telegraph

MPs claim FSA misled Select Committee over Iceland - Telegraph: "'Answers from the FSA are unhelpful to the point where we wonder whether they might constitute deliberate obfuscation', MPs on the committee claimed. The public criticism is deeply embarrassing for the FSA."

I think you will find that the FSA has been misleading the Committee, and everyone else for that matter, for years, the worst example was when the CEO misled the MPs two years in a row. He left soon after that last episode.

If the acts or omissions were deliberate that is a crime under the charge of Misconduct in Public Office, if they were due to incompetenec then those responsible should be sacked.

John McFall rightly declared that "Legislation solves nothing", we would contend that the Financial Services and Markets Act which empowers and protects the FSA from prosecution was passed without proper examination. The Bill istelf was declared compatible with Article 6 of the Human Rights Act 1998 by someone who is not a lawyer. We shall see what the High Court says on 8th and 9th July 2009.

"It is hard to imagine a more stupid and more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong". Thomas Sowell

Evan Owen
The IFA Defence Union
www.ifadu.co.uk

Monday, June 1, 2009

Critics want power stripped from the Financial Services Authority | Mail Online

Critics want power stripped from the Financial Services Authority Mail Online: "While the Lords said the government should 'carefully consider' whether supervisory powers should be returned to the BoE, they acknowledged the arguments are by no means 'clear-cut'."

No, not at all clear cut.

Would the B of E acted in a way any different from the way the FSA followed HM Treasury instructions to 'go easy on the banks'?

Would the 740 Bank of England regulators have spotted the dead parrot banks whether they were at Canary Wharf of their old haunt in Threadneedle Street?

If the banking supervisory duties are returned to the Bank will the employees also return? If so, who pays for the horrendous cost of reinstating their pensions?

Evan Owen
The IFA Defence Union
www.ifadu.co.uk