Tuesday, February 23, 2010

FT.com / UK - Tories pledge rapid reform on regulation

FT.com / UK - Tories pledge rapid reform on regulation: "'Think about the enormous disruption this would create at a time of great uncertainty for the financial services sector and the economy generally. To say that this would be ill-timed is a massive understatement,' Andrew Love, a Labour member of the Treasury select committee, told a Westminster event.
Vince Cable, Liberal Democrat Treasury spokesman, said the reforms would involve 'major costs . . . and massive uncertainty . . . at a crucial time'."


Dear Tories, please stop and think, listen to those who have been regulated rather than those who have been regulating as well as those who have created every manifestation of failed regulators to date.

Saturday, February 20, 2010

MM leader: New levy is an unacceptable burden on advisers | Opinion | Money Marketing#comments#comments#comments#comments#comments#comments#comments#comments#comments#comments#comments#comments

MM leader: New levy is an unacceptable burden on advisers | Opinion | Money Marketing#comments#comments#comments#comments#comments#comments#comments#comments#comments#comments#comments#comments: "And so IFAs are left to carry the can for the failings of structured product providers, stockbrokers and regulators."



Mike Fenwick:

1985 - in this very paper, courtesy of Roger Anderson, I said:

"... The over-riding criteria may be your ability to adhere to a set of subjectively assessed rules, and even more significantly, your ability to absorb the running costs involved in enforcing such rules. Ignore honesty! It may be the rules and costs which prove to be your prison."

Thus it has proved to be, and the lower the number of "remaining participants in the relevant market" the higher will be their individual costs, both in regulatory fees and in funding the miscreants.

Nor is this confined to IFAs - ask any Building Society CEO (and yes, there are less of them), how they feel about bailing out the Banks.

Monday, February 15, 2010

FTAdviser.com - FSA reveals less productive ombudsman increased costs

FTAdviser.com - FSA reveals less productive ombudsman increased costs: "The regulator said: 'A fall in productivity combined with an increase in staff numbers has resulted in a rise in the Fos' unit costs - total costs, excluding financing, divided by the number of case closures.'"


Time for an urgent overhaul of regulation, it is a complete shambles.

Saturday, February 13, 2010

FSA's expanding universe is a bewildering black hole for cash - Telegraph#postComment#postComment

FSA's expanding universe is a bewildering black hole for cash - Telegraph#postComment#postComment: "Just look at the figures. Ten years ago, the FSA employed just the 2,030 pointy-headed regulators, beavering away with an annual budget of £196m. Now staffing is heading for 3,260 by the end of this financial year, with productivity – rather predictably – going in the opposite direction. The budget's gone galactic, with the FSA now requiring £455m a year. We all pay because the 27,000 regulated firms just pass on the costs to the consumer."



Regulation is bust because of the regulators themselves, the 740 BofE banking regulators were moved over to the FSA together with their rickety computer system, dusty files and gold-plated pensions (which have been whittled down so hence the rush to get back from whence they came). These banking regulators must have been busy doing anything other than regulating, shopping at Canary Wharf perhaps, Hector had no control over the complicated mess created by the 'merger' of 12 regulators over a decade ago, the BofE crowd were on the top floor, PIA underneath with the friendly society supervisors in the sub vault, none of them talk to each other, it is an epic struggle for turf which will carry on after the Tories (if they win and if we can't make them see sense) dismantle it and cobble togther two, or perhaps THREE new regulators from the constituent parts, whatever they happen to be.

How do I know this? Because people who used to work there and some who still do told me so.

Hector should stay even if it is just to point at the pitfalls of what the Tories are doing, and of course to witness at first hand the mayhem the RDR will create.

As far as passing on regulatory costs to clients is concerned I think you will find that small firms will find that impossible unless they start charging higher fees in which event the regulator will kick up a fuss.

I could write a book about the failures of regulation but is there a market for such a depressing read?

Friday, February 12, 2010

IFAs will only get 30 days to pay £70m FSCS bill | News | Money Marketing

IFAs will only get 30 days to pay £70m FSCS bill | News | Money Marketing: "She says: “In addition to these firms, we are continuing to see more failures coming to us in the investment area, and these are likely to impact further on our funding requirements later in the year.”"

This is untenable, it is not sustainable any more than FSA fees or levies announced shortly before they are due.

The regulator insist that firm must know their financial situation by the day, well yesterday many IFAs were fairly certain about their balance sheet, today they are not.

Why should innocent advisers be shelling out for what the crooks did and the regulator failed to do? Acts and ommissions!!

George Osborne put on the spot by departure of Hector Sants - Times Online

George Osborne put on the spot by departure of Hector Sants - Times Online: "The truth is different. Sants spent his Christmas break contemplating whether to seek another three-year term and seriously considered putting to the board a proposal to remain in his post for at least another year."



Hector was more likely to have been frustrated by the Tory proposals which are being engineered by the same people who brought regulation to its knees, Hector was shocked to discover that I, the man who wanted to 'burn it down', agreed that the plans are seriously flawed and that I believe that we can 'work it out', we as in the financial services industry and the regulator. So, Hector gave up because he was outnumbered by muppets, a great shame and a tremendous loss for UKPLC because we have entered that dark void each and every change of government creates, but as the saying goes it isn't over until the fat lady sings.

The really sad part is that ordinary people like us have some good ideas, a different approach to regulation, a socially useful one, unfortunately money talks.

Wednesday, February 10, 2010

Steve Richards: The tide has turned, and the Tories are swimming against it - Steve Richards, Commentators - The Independent

Steve Richards: The tide has turned, and the Tories are swimming against it - Steve Richards, Commentators - The Independent: "This week the chief executive, Hector Sants, announced he was standing down. Perhaps he will join the Bank of England with its already overcrowded cast list of governors and deputy governors preparing to regulate under the Tories. But it would be more straightforward to let the FSA get on with it rather than move them all in order to make a political point."


This is the problem with politicians, they think change for the sake of change shows they are actually doing something new. Unfortunately it will be the same old regulators all over again.

FT.com / UK - Sants resignation leaves confusion at FSA

FT.com / UK - Sants resignation leaves confusion at FSA: "The CEO, who will stay at the FSA until the summer, has been outspoken in his criticism of Conservative proposals to dismantle the agency. He described the Tory plan to give the FSA’s supervisory role to the Bank of England and spin out consumer protection responsibilities to a new agency as a distraction that could lead to a “turf war”."


There has to be great concern that whilst those at the top play games with all our futures we worry about who is looking after the long term interests of our clients, the consumers. From down here we all see a merry-go-round of bankers, McKinsey people, and politicians faking expenses claims, even using the Bill of Rights as a defence for doing so, what a cheek.

It was goodbye to John Tiner (middle names Justin Time), farewell to David Kenmir (creator of the Kenmir Effect), bye to Hector Sants, possibly ta ta to Brown.

We have recycled more regulators than we can name in this small space, New Labour created a ‘Tripartite’ system, the Tories who voted for that now say we must try something else, another stab in the dark? Another game of political football? Meanwhile we ask if the consumer is one iota better off for all this recycled regulation, not in my opinion.

Hector should spend more time with his family; he is a decent man who obviously had a difficult time controlling all those civil servants who find it hard to listen to reason. I’m glad I met him before he went; hope that wasn’t the reason for his departure!

Finally, we should be worried because things could get worse, in the meantime the banks and the networks who wanted the ‘restricted advice’ or multi tie element of the RDR have won the tug of war while small firms have once again allowed the more powerful (and well financed) lobby groups to have their cake and eat it. Divided you fall folks, gathering IFAs together is like herding cats. Prove me wrong and we could make a difference.

Tuesday, February 9, 2010

FSA in confusion as chief Hector Sants quits regulator - Telegraph

FSA in confusion as chief Hector Sants quits regulator - Telegraph: "A Tory source insisted that Mr Osborne did 'not see this as the end of Hector's public service career'. Others suggested that Mr Sants had fallen out with Lord Turner, the regulator's high-profile chairman. But an FSA spokesman denied such 'conspiracies'."

Never discount anything. Quite a few of my contacts threw this one in the pot.

However, I am with Hector in wishing to retain the FSA, this country doesn't need any more instability.

Sunday, February 7, 2010

FT.com / Companies / Property - Pensions pile into UK property

FT.com / Companies / Property - Pensions pile into UK property: "Institutional property funds raised more than £3.2bn last quarter, dwarfing the previous peak of £1.7bn collected in the 2006 boom."

Is this one answer to the alleged shortage of mortgage finance?

FT.com / UK / Business - Lenders warn of mortgage shortages

FT.com / UK / Business - Lenders warn of mortgage shortages: "“We are not suggesting that government pour vodka in the punch bowl,” he said. “We are asking how government can get the patient to sober up without too much shock therapy.”"


If house prices dropped by 50% would that halve the 'demand' for mortgages? If planning laws were relaxed so that people could build houses on their own land more easily would that more than halve the price of land?

If bankers took a pay cut or just shelved the pay increases, the bonuses and pension benefits would that reduce their costs? And ours too??

Bankers must realise soon that the taxpayer is propping up their ivory towers or else we will all be doomed when the property market collapses.

FT.com / Companies / Financial Services - Geneva office for Brevan Howard staff

FT.com / Companies / Financial Services - Geneva office for Brevan Howard staff: "The fund manager, which oversees just over $27bn, had first told clients it was considering the move late last year."



Yet another socially useless activity that other countries are welcome to have.

Insurers 'paying too much commission to win pensions business' | Business | The Observer

Insurers 'paying too much commission to win pensions business' | Business | The Observer: "A spokesman for the FSA said the regulator was unaware of any insurers increasing commission rates to outbid rivals or adopting aggressive tactics ahead of the ban. He said officials would be extremely concerned if it became aware of firms deploying large amounts of capital to pay upfront commissions."

"UNAWARE", should be their motto!!

Thursday, February 4, 2010

FT.com / Companies / Banks - BofA charged with ‘duping’ shareholders

FT.com / Companies / Banks - BofA charged with ‘duping’ shareholders

All, and do mean ALL, companies dupe their shareholders and sometimes the regulators and their political puppeteers are party to the deception in the name of financial stability!!

Wednesday, February 3, 2010

FSA edict on bonuses to spark legal challenges - Telegraph

FSA edict on bonuses to spark legal challenges - Telegraph: "Simon Morris, of CMS Cameron McKenna, said: 'The FSA has issued a stream of new guidances, speeches and letters but actually there haven't been any new rules. The bankers' contracts – even those with multi-year guarantees – were signed and agreed under the full recognition of the law. 'The FSA has no right to threaten sanctions against banks based on a new interpretation of their rules, rather than a new law.'"


Simon Morris forgets one thing.

Monday, February 1, 2010

Warning of new housing crash because FSA's reform plan is too weak - Times Online

Warning of new housing crash because FSA's reform plan is too weak - Times Online: "The paper says: 'Far from proposing fundamental regulatory reform, the FSA's package of proposals offers a modest change to the status quo.' At worst, the FSA is guilty of 'fig leaf' regulation, it says."

I have been in the mortgage market since 1985, in my opinion it is impossible to regulate every aspect of lending or house price volatility. If Mr David Steven can offer solutions to all the problems he perceives then I would accept his very scary predictions.