Tuesday, March 30, 2010

FSCS adds Lehman structured product claims to adviser Keydata levy | News | Money Marketing#comments#comments#comments#comments#comments#comments#comments#comments#comments#comments

FSCS adds Lehman structured product claims to adviser Keydata levy | News | Money Marketing#comments#comments#comments#comments#comments#comments#comments#comments#comments#comments


Mike Fenwick | 30 Mar 2010 8:38 am

In my above post I asked:

Is the Post Office an Intermediary or not?

Are they included in the list to whom the FSCS will issue a levy request?

Let me add to that comment, by asking:

Are Tesco an Intermediary or not?

Are they included in the list to whom the FSCS will issue a levy request?

Are Sainsburys an Intermediary or not?

Are they included in the list to whom the FSCS will issue a levy request?

In considering only:

- some of our biggest "Retailers"

- and those "Distributors" who receive substantial Government funding

- you may detect something worth thinking about over what was called and defined as a "Retail - Distribution" Review

- something I would suggest that should be of considerable interest to the OFT

- if they appraise who are included and who are excluded from the list of those who are asked to pay for "Intermediary" levies when called upon to do so by the FSCS.

- if only the OFT fully understood that they have a singular responsibility to scrutinise the actions of the FSA for anti-competitive measures - and effects.

And yes ... once you start thnking about the issue there are plenty more to add to that list, given the conclusions reached by the FSCS over Keydata.

Perhaps it is time for the OFT to do some thinking?

Monday, March 29, 2010

Lancashire IFA jailed for five years for defrauding clients | News | Money Marketing

Lancashire IFA jailed for five years for defrauding clients | News | Money Marketing

Never mind, the RDR will put and end to all this, professionals never do that do they?

Oh, silly me, I forgot that 'some' solicitors run off with £millions from client accounts and others are busy defrauding lenders with the assistance of other 'professionals', valuers for example, and the Law Society took 300 years to get to this level of 'professionalism'.

Oh, dear, the RDR will miss its target as predicted at outset.

Nobody listens, they may smile, nod and make 'interesting' comments but they certainly haven't a clue.

Thomas Sowell's quotes include:

No matter how disastrously some policy has turned out, anyone who criticizes it can expect to hear: "But what would you replace it with?" When you put out a fire, what do you replace it with”

“You will never understand bureaucracies until you understand that for bureaucrats procedure is everything and outcomes are nothing.”

“The most basic question is not what is best, but who shall decide what is best”

“Too much of what is called "education" is little more than an expensive isolation from reality”

“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"

Quite!

FSA may have to reveal firms it is investigating over arrears charges | News | Mortgage Strategy#commentsubmitted

FSA may have to reveal firms it is investigating over arrears charges | News | Mortgage Strategy#commentsubmitted

Interesting, if this Bill is enacted will we be able to get to the bottom of the LAUTRO 11, 12, 19, 33 or however many used 'Inappropriate charges' to set premiums at outset?

I might hang on a bit longer to see.

Saturday, March 27, 2010

Rivals FSA and SFO make a mark at last | Mail Online

Rivals FSA and SFO make a mark at last | Mail Online: "The Conservatives have pledged to dismantle the FSA if they win power, with the tacit understanding that all 450 staff could be handed over to the SFO. This juicy prospect for the SFO is countered only by the threat that Labour would concentrate all criminal prosecutions in an expanded Crown Prosecutor's office, depriving the organisation of a major part of its raison d'etre. Though the underlying political battle is real, the coincidence of recent activity is, in truth, more prosaic."


Whoever wins the next election, and secures sufficient majority to make changes, should concentrate on ridding the FSA of all the dead wood, all the flotsam and jetsam built up over two and a half decades of failure.

SIFA accuses FSA of "total cop-out" on restricted advice oral disclosure - IFAonline

SIFA accuses FSA of "total cop-out" on restricted advice oral disclosure - IFAonline

A man was taking a trip in a hot air balloon. Realizing he was lost, he spotted a woman below and reduced altitude. He descended further and shouted to the lady

"Excuse me, can you help me? I promised a friend I would meet him an hour ago, but I don't know where I am"

The woman below replied, "Well, you're in a hot air balloon, hovering approximately 30 feet above the ground. You are between latitude 40 and 41 degrees north and between longitude 59 and 60 degrees west."

The balloonist took this in for a moment then said "You must be an IFA."

"Actually I am," replied the woman, "But how did you know?"

"Well," answered the balloonist, "everything you have told me is technically correct but I have no idea what to make of your information and the fact remains I'm still lost. Frankly, you haven't been much help at all. If anything, you've delayed my trip."

The woman below responded, "You must be in the FSA."

"I am." replied the balloonist, "But how did you know"

"Well," said the woman, "you don't know where you are or where you're going. You have risen to where you are due to a large quantity of hot air. You made promises which you've no idea how to keep, and you expect the people beneath you to solve your problems. The fact is you are in exactly the same position you were in before we met, but now, somehow, it's my fault..."

Friday, March 26, 2010

Ever decreasing circles?

If we were regulators would we be any better or, God forbid, even worse than the ones we have now?

We are human beings, packed full of faults.

Everywhere I look, whether it is the regulators, the government, the 'representative bodies', the firms they represent, the consumer bodies, the media... everybody - all I see are empire builders, people who want to sit at the top table, preferably at the end where the big chair is.

When asked whether all adviser/broker bodies could work as one I was told by one trade body head honcho that 'one DG would have to leave the room', it appears to be all about turf and certainly nothing to do with the common good.

Are too many people missing the point here?

Anyway. Where is the 'service' in financial services? Are we the worst 'service' sector that the Man on the Clapham Omnibus has to face? I don't think so.

I'm only speaking as an observer who has seen most of what is out there to see and I don't believe that this is what the nation deserves.

"Why can't we work out our differences? Why can't we work things out? Little people, why can't we all just get along?"

What is the title of that film? How many times was what was said by all concerned misunderstood?

Evan

Thursday, March 18, 2010

New ABI chief calls for FSA to be proportionate | News | Money Marketing

New ABI chief calls for FSA to be proportionate | News | Money Marketing: "“It is important that the FSA is still open-minded and balanced about its judgements on likely consumer detriment and what consumers actually want.”"

Telling, or asking, the regulators to be “open-minded and balanced” is misplaced when the regulated are causing so many problems that it stretches the regulator's resources to breaking point. Nobody can deny that it is a mess out there.

Would I want to be a regulator? I might think about it if the regulated promised to behave themselves and the regulator was willing to listen to some 'mavericks' who find it hard to say yes all the time.

Tuesday, March 16, 2010

Cirencester pays 94% of IP claims | News | Money Marketing

Cirencester pays 94% of IP claims | News | Money Marketing


Hector, Lord Turner

This is socially useful financial services, like Paul Hudson I wonder how the service provided by this Society compares with the rest of the market.

It worries me that the FSA believes that what the banks sell is 'better than nothing'.

Will this socially useful product be available to the wider market post RDR? If not, why not? Does that then beg the question "is the RDR socially useful".

FSA reveals product regulation plans | News | Money Marketing

FSA reveals product regulation plans | News | Money Marketing

Friday night ... went down the pub with my mates as usual. Typical pub, full of noise, outbreaks of raucous laughter etc., you know the type of thing, but I overheard these two guys deep in conversation at the end of the bar.

Now, I didn't hear it all because of the hubbub, and shouts for the next round etc., but what I did hear was so interesting I thought should post about it.

Apparently there is a global discussion amongst car manufacturers about moving into the personal investment markets, based on a single premium structured product. Now the minute I heard that bit, I edged closer and tried to hear more.

It seems that the single premium will have two elements, one investments of the consumers' choice via a platform and the other element gets you a new car.

They sniggered at one point ... it seems once each year any depreciation on the car will be deducted from the investment element - but a bit of skilful hedging will disguise what is actually happening.

All above my skill levels to be brutally honest, but they both agreed they had the exam passes to get it all off the ground.

Anyway, I digress ... it seems that the real attraction for car manufacturers is to do with faults in car design.

From what I managed to hear they have been monitoring the FSA's thoughts over product manufacture in the investment markets, and how this looks as though it will relate primarily to mystery shopping and pro-active scrutiny of the sales environment for products, but not perhaps back to the original manufacturing of any product.

Of particular interest seems to be the fact that the FSA have said there are far too many products for them to make judgements on each individual product, and they laughed out loud when they listed the bits that went into each new car.

Then the karaoke started .... but as best I heard it, the real clincher seemed to be that if it all went ahead, it would always be the product retailer that would be first in line over responsibility from now on over sticky accelerator problems and the like.

It may have been the drink they had already consumed, but they became very animated as they imagined this brave new world of "Why did you sell this defective product - and never - why was this unsafe product allowed out on the streets in the first place."

Because of the noise, I am also sure I misheard the bit about the FSA having already agreed that many ex-IFAs would make ideal used car salesman, and giving an assurance that there would soon be a plentiful supply.

A rather loud version of "Delilah" by one of my mates meant I heard no more.

Is any of this true?

Well, maybe I should tell you - I really wasn't down the pub last night.

But I was thinking about going on the phone to my MP about this idea of mine about an "endowment scrappage" scheme.

Osborne blasts FSA over collapse of Lehman Brothers | Business | guardian.co.uk

Osborne blasts FSA over collapse of Lehman Brothers | Business | guardian.co.uk: "Osborne, though, said it was important to take away the regulatory responsibilities that were handed to the FSA in 1997.
'We need a change of approach to regulation, and I think the people best able to bring about that change are the Bank of England. They have the ability to step back and take bigger judgment calls about how indebted the economy has become and whether or not, even though things have been technically complied with, the bigger picture points to serious risks to the economy.'"


Dear Mr Osbourne

The FSA and the legislation supporting it was created by Parliament. Yes, all those MPs voted (when they could be bothered to attend) for a system with many large gaps and the entire banking system fell into one of them because the FSA is not as operationally independent as you and your political colleagues might have been let to believe.

You are now taking advice on the reformation (yet again) of regulation from people who created the last regulator, and the one before that. Please explain what will be different, apart from the name, if you get your own way and reshuffle the regulators who have been sitting behind those desks for two and a half decades, more than 740 of them were at the Bank of England before they were transferred to the FSA yet they failed to spot the dead parrot.

Make no mistake, the "City" is deeply concerned by your proposals, so am I even if one of your advisers who was initially unhappy with breaking up the FSA reassures me that he now believes some positive changes can come about.

As an observer of regulation since 1985 I am not convinced that you or any of your advisers have what it takes to try something radical.

Yours faithfully

Evan Owen
Regulatory consultant

Saturday, March 13, 2010

The FSA got us into this mess; it can get us out - Telegraph

The FSA got us into this mess; it can get us out - Telegraph: "Don't transfer the regulation of consumer credit from the Office of Fair Trading to the new CPA. Transfer it to the FSA instead, thereby creating a unified regulatory regime for financial services firms and consumers.
Scrapping the FSA will cost billions, in all likelihood take years and create an administrative nightmare. But most importantly, the Tory vision will not guarantee better regulation or improved consumer protection."


Well written Paul Farrow. I couldn't have put it better myself.

Thursday, March 11, 2010

Financial Services Authority to tighten watch on rogue products - Times Online

Financial Services Authority to tighten watch on rogue products - Times Online: "The aim would be to identify problem products much earlier, Lord Turner said, instead of taking the more common route of addressing consumer complaints after the event and ordering large compensation payments to mistreated customers."

Dear FSA

If you had been scrutinising "the marketing and distribution of products" at the banks, insurers and investment companies instead of concentrating every waking hour on IFAs we might have seen fewer "consumer scandals".

If indeed this is a sea-change I hope the regulatory supertanker employs people who know what they are looking for because they have been working at the coal face since before 'regulation' came along two and a half decades ago...just think, 25 years of regulation and consumers have nothing to show for it while the regulator grows like Topsy and the regulated dwindle away.

Regulation is bust.

Wednesday, March 10, 2010

FTAdviser.com - Man from the Pru

FTAdviser.com - Man from the Pru: "We need people on the ground, thousands of Mr Hendersons back on the road. They do not need to be highly qualified advisers. They simply need a small portfolio of stakeholder products and a real interest in helping people do what they want to do with their money. So Mr Leeson, why not go back to the days of the man from the Pru?"

So true but without some regulatory balance and a common sense approach from the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme (FSCS) I predict that this will not happen in my lifetime.

Tuesday, March 9, 2010

Payment protection insurance bill could top £4bn - Times Online

Payment protection insurance bill could top £4bn - Times Online: "Nearly half a million people could share more than £4 billion in compensation after being mis-sold payment protection insurance, the Financial Services Authority said.
The payouts could also go to people who have not made formal complaints and may not even be aware that they had been sold an inappropriate policy.
The insurance, which is sold alongside credit agreements, covers payments in case of illness or unemployment.
The City regulator has revised upwards the original estimate for the number of complaints it expects providers of the insurance to handle in the coming years to 450,000, from 158,000 it said originally."



Once again it is regulation after the event, the FSA is incapable of examining the sales processes of large financial institutions, it has claimed to me that it does not have the resources and with 16 regulators supervising the likes of Barclays it is unsurprising that the practices of lenders have passed under the regulatory radar despite decades of warnings.

The banks pay 28% of the FSA's costs yet produce 99.999% of our problems.

Society is in dire need of regulatory balance, I see none.