Friday, July 30, 2010

You cannot separate clients | Opinion | Money Marketing

You cannot separate clients Opinion Money Marketing

I forgot to add a comment to Chris Gilchrist's article, or was I busy doing something else?

To some people everything is a complex financial problem and I should know because I used to advise every level of society right up from people on the dole, I was practically a social worker as were many of my colleagues, if I'd focussed on just making money I might still have been an IFA today, sadly I have always been a sucker for helping the underdog.

Thursday, July 29, 2010

FTAdviser.com - New FSA powers could signal return of the long-stop

FTAdviser.com - New FSA powers could signal return of the long-stop


"Return"?

It never went away, it was simply ignored. IFADU tried every trick in the book and ended up with one or two cases before the European Court of Human Rights, they are there right now which beggars the question "why now", what has AIFA done for you?

FSA creates long stop for redress schemes | News | Money Marketing

FSA creates long stop for redress schemes | News | Money Marketing

Dear Mr Strange

You are quoted as having said:

"I think this is the first time we have achieved some element of a long stop within financial services.”

Having been through every hoop, loop and turn on this regulatory merry ground since 1985 I can only declare that this is indeed a strange thing to say because what Paolo mentioned above (SI2326) cemented what governed the previous regulator (PIA) and Ombudsman scheme (PIAOB), namely "THE LAW" and in particular the 15 year long stop. This has been argued tiem and again and a recent JR against the FOS highlighted what HM Treasury described as the ‘legitimate expectation’ of firms not to have to face retrospection.

If I am wrong could someone tell me?

Are you claiming a victory here with “we have achieved”? Many IFAs wonder what AIFA has been doing all these years, the ones on the Council who don’t worry about it are either unable to comprehend all this or they think they can offload all their liabilities on their ARs.

Saturday, July 17, 2010

RDR - Retail Destruction Review - NOT Retail Distribution Review

HOW HAS THE FSA MANAGED TO TURN A BLIND EYE TO WHAT THE WORLD REALLY THINKS ABOUT THE FSA’s RDR?

Is the FSA proud of its creation?

Otto Thoresen - CEO Aegon: "The RDR is only helping wealthy customers"

AXA April 2009:"We will lobby the FSA to make sure the RDR does not mean less are able to access advice"

David Cox - SuuqeaMarch 2009: "Two million clients could be left without an IFA after RDR - 40% could leave the industry"

FSCC January 2009: "Financial advice will be less widely available post RDR"

Institute of Financial Services: "RDR will impair financial advice before improving it"

Alasdair Buchanan Scottish Life November 2009: "Sales advice is a real cop out and extremely confusing to investors"

Stephen Gay – Aviva June 2009: "The regulator has failed to consider the danger of adviser charging limiting access to advice for those on lower incomes"

Lord Lipsey: "Consumers in the middle (not high net worth or money guidance fodder) to be sold products by banks under the contradiction that is sales advice"

Walter Merricks former Chief Ombudsman: "I think it would be unwise to count on the assumption that complaints from the retail investment world are suddenly going to go down as a result (of the RDR)"

Deutsch Bank report August 2009: "There has been industry talk of 30% or even 50% if IFAs exiting the industry post 2012, which is not impossible"

Paul Selly HBOS: "Bancassurers set to benefit"

Richard Howells Director Zurich LifeJune 2009: "The big question mark is still around what benefit it will have for the ultimate consumer. I am still not convinced that all of these changes, when you sit down with a consumer and explain them, actually give rise to a consumer benefit that I can really hang my hat on."

Martin Lewis Money Saving Expert June 2009: "There's a worrying possibility that the FSA is about to kill off independent financial advice in the UK for all but the wealthy. I do hope I'm wrong. I'm not convinced most people will want to pay for advice. The commission route has the advantage that you don't pay a fee each and every time you want information; you can go without the worry of laying out cash. What I find most galling though is that bank-based advisers - those primarily responsible for PPI misselling, endowment mis-selling, investment mis-selling and generally poor advice all round are still to be allowed to be remunerated based on the number of sales."

Janet Walford OBE, Editor Money Management Sept 2009: "I am not paranoid enough to believe that the FSA has a hidden agenda to do away with small IFAs, but the law of unitended consequences may well mean that this will be the result. This is especially the case when set alongside the myriad of other proposals that are costing some £430 million to set up, with ongoing fees of £40 million pa thereafter, a mind boggling amount of cash.

Peter Hamilton barrister, Source: Money Management Oct 2009, Scrapping the FSA by Marie Jennings MBE: "The Financial Services and Markets Act does not permit the FSA to cancel an authorisation simply because the FSA has changed its views on what the appropriate qualifications should be….It is one thing to impose new rules for new entrants to the IFA profession, it is quite another thing to disqualify someone who is already qualified."

David Hazelton of Tax Incentivised Savings Association(TISA) 30/10/09: The RDR could be detrimental to consumers both in terms of higher product charges and an increase in the cost of advice, warns the Tax Incentivised Savings Association(TISA). Implementation costs for the RDR are being "seriously underestimated" and product charges will consequently have to be raised.

Bankhall managing director David Golder 03/11/09: "We say write to the regulator, write to your MP. Do not let the FSA get away with some of the things that will lead to the widespread decimation of our industry."

Robert Kerr, head of retail distribution development at Scottish Widows says: The RDR could have the unintended consequence of "disenfranchising" the majority of consumers from financial advice. "Our key concern is the RDR proposals will act to drive advice upmarket, with financial advice becoming the preserve of the wealthy leaving mass-market consumers un-served,"

Nigel Waterson when Shadow pensions minister : "While no-one can object to raising the standards of training and competence, should an emphasis on exams take precedence over on-the-job training and experience? Is the 2012 implementation date practicable given the extra qualifications and changes in systems that will be required to be in place?

Richard Hobbs Director Lansons Regulatory Consulting 16/07/10: “I have to say, it (RDR) only just survived an executive committee meeting in March 2010 at the FSA. The FSA are not particularly proud of the RDR but it is a question of losing face, so I think they will carry on.”

An email from Simon Mansell

Thursday, July 15, 2010

Chart: 46% of people couldn't afford their mortgage - This is Money Blog

Chart: 46% of people couldn't afford their mortgage - This is Money Blog

Why aren't 46% of them homeless?

Every day the FSA comes to conclusions which defy the facts and dare I say it, logic.

Using only 9,000 examples I could contend that 46% can't afford their rent.

The government needs to grab the regulators by the ear, but it won't will it?

Wednesday, July 14, 2010

Insurance Times - Fair Fees: Brokers could boycott FSA fees

Insurance Times - Fair Fees: Brokers could boycott FSA fees

Can you blame your representative bodies for failing to ensure that the FSCS is based on fairness and logic?

Is it not time for ALL financial services firms to unite under a single trade body?

The only problem with that idea is that you may think you are different whereas in the eyes of the regulators you are simply another source of fees to pay their wages and fill the black hole in their pention pot and therefore no different in any other regulated firm, apart from the banks of course, they still get away with financial crimes.

Those of you who think the FSA is on its way out should remember that the same culture will prevail because the same regulators will be sitting behind their desks sending out the bills for you to pay.

Sifa doubts judicial review of FSCS will be successful | News | Money Marketing

Sifa doubts judicial review of FSCS will be successful | News | Money Marketing


Mike Fenwick | 14 Jul 2010 2:13 pm

This is an extract from my post on Nic Cicuttis' article " In more recent e-mails shared with Evan Owen, Chris Cummings, Alan Lakey, and Paul McMillan, Gareth Fatchett has been made aware that my involvement may assist in the JR, and may address aspects not yet raised by him. Clearly, whether that is to be the case depends on whether sufficient funds are raised to allow the JR to proceed, but I am happy to place on record that I will assist, if the JR proceeds, and if Gareth eventually deems any contribution from me worthy of inclusion."

Post and full article here:

http://www.moneymarketing.co.uk/regulation/should-you-support-fight-against-fscs?/1014790.article

However, despits my "ifs" let me in this post raise an issue I have not seen raised by anyone else, and is one of those I cannot see raised by Gareth Fatchett in his papers to date.

Before reading the comments below, try searching the MM site using just two words "client money".

You will get quite a number of hits, J P Morgan, Close Brothers etc etc - all referring to how the FSA view the need for authorised firms to handle the monies entrusted to them in a manner which is beyond reproach.

If you haven't bothered to do that search, let me offer you an extract from one of the articles:

"FSA director of enforcement and financial crime Margaret Cole says: “The FSA has repeatedly emphasised the importance of ensuring client money is adequately protected.

“Despite being one of the largest holders of client money in the UK, JPMSL failed to do so.

“This penalty sends out a strong message to firms of all sizes that they must ensure client money is segregated in accordance with FSA rules. We have several more cases in the pipeline.”

Stick with me, just a while longer and I will explain where I am heading, but we need an extract from the FSA fees rules - these will suffice:

"industry block - (in DISPFEES) a grouping of firms by common business activity for the purposes of calculating the general levy.

2.1.8 G The amount payable by each fee payer will depend upon the category (or categories) of regulated activity or exemption, or other relevant activity applicable to that person (fee-blocks). It will, in most cases, also depend on the amount of the business that person conducts in each category (fee tariffs).

2.1.9 G By basing fee-blocks on categories of business, the FSA aims to minimise cross-sector subsidies. The membership of the fee-blocks is identified in the FEES provisions relating to the type of fees concerned."

Now, I like many others have questioned why if Keydata were authorised as one thing, it was the decision of the FSCS that it was another thing altogether. Yes, indeed, that is one important part of what Gareth Fatchett is addressing.

But let me address that issue in a different way, one that I have not seen raised.

Keydata paid fees to the FSA - now the obvious question is under what category were those fees requested by the FSA and paid by Keydata.

The less obvious but perhaps more important question is "Where has that money gone - particularly given the FSCS decision"?

Re-read what the FSA set out as their rules on fees, perhaps concentrate on the intent to avoid cross-subsidy.

Now my question

- have the FSA taken into account the FSCS decision, and immediately upon knowing that decision, re-allocated any fees paid by Keydata to the Intermediary class

- if not, then either they do not agree with the FSCS decision, namely Keydata was NOT an Intermediary

- or they have not post the FSCS decision allocated the monies in their care appropriately and imho their pronouncements on the ability of others to properly segregate monies ... well, need I say more?

As Deep Throat once wisely advised "Follow the Money". Doing so can uncover more than perhaps you may initially realise.

Mandelson memoirs: Tony Blair 'called Gordon Brown mad, bad, and dangerous' - Telegraph

Mandelson memoirs: Tony Blair 'called Gordon Brown mad, bad, and dangerous' - Telegraph: "Mr Blair was quoted as saying: 'He's like something out of the mafiosi. He's aggressive, brutal ... there is no one to match Gordon for someone who articulates high principles while practising the lowest skulduggery' he is alleged to have said."

Skulduggery?

Er... the Financial Services and Markets Act 2000 for example? The declaration that it was compatible with Article 6 of the Human Rights Act 1998?

Tuesday, July 13, 2010

Kent Reliance and JC Flowers to be uneasy partners - Telegraph

Kent Reliance and JC Flowers to be uneasy partners - Telegraph

It is called 'strangulation by regulation".

FT.com / Companies / Banks - FSA looks to impose checks for mortgages

FT.com / Companies / Banks - FSA looks to impose checks for mortgages: "The FSA is also proposing a 20 per cent “buffer” for customers with poor credit ratings – meaning banks would have to reduce the amount they would lend them by a fifth."

So, banks are no longer allowed to use their considerable experience in making adult decisions about their lending?

Sunday, July 11, 2010

Osborne defies EU over base for regulator - Telegraph

Osborne defies EU over base for regulator - Telegraph

Perhaps the answer is to leave the 'Union'?

Hester to take on Turner's 'socially useless' banks jibe - Telegraph

Hester to take on Turner's 'socially useless' banks jibe - Telegraph: "BBA chief executive, Angela Knight, told The Sunday Telegraph there was a perception among the public that 'everything banks do is wrong'.
'We feel unbelieved when we tell the truth,' said Ms Knight, who in her own speech to the conference will make a call to regulators not to drive financial services business out of the UK with overly harsh laws."


Dear Ms Knight, where have you been for the last 25 years?

HSBC chief warns over plans to break up banks - Telegraph

HSBC chief warns over plans to break up banks - Telegraph

Should banks be "economically vital"? If so must there be some control on their activities and the impact upon society? Are all the activities of the banks socially useful?

Saturday, July 10, 2010

Keydata Scandal - Is My IFA Liable? | This is Money

Keydata Scandal - Is My IFA Liable? | This is Money

Is this an example of consumers taking risks they would not normally contemplate simply because there is a perceived 'guarantee' of compensation from the regulatory system when in fact there is no such guarantee?

Friday, July 9, 2010

MM leader: Make a stand against this unfair levy | Opinion | Money Marketing

MM leader: Make a stand against this unfair levy | Opinion | Money Marketing


Yes Paul, I wish I could support this action but I don't have the money or even the conviction and neither do the vast majority out there which is evidenced by the number of pleas for 'more money'.

Nobody has stood up more than I have, nobody has wasted more time or used the very limited funds of the brave (mine included) and forced those who did not want to get involved in anything at all to pay for the defence of the fruitless challenges. Many will say that we used the wrong arguments as do I now with this case, if it goes ahead.

Balance is the order of the day but I can't see any, not anywhere.

It is quite depressing to see the industry being decimated without one tangible benefit for consumers in return.

What has regulation done for us?

FSCS judicial review - Regulatory Legal and Aifa go head-to-head | News | Money Marketing

FSCS judicial review - Regulatory Legal and Aifa go head-to-head | News | Money Marketing

We desperately need balance, I see none. All I see is an unfair and unreasonable regulatory system where the IFAs are continually being let down by all concerned.

How did we ever get into this situation? Will the 'new' regulatory system be fair and reasonable?

You now have the opportunity to change things for the better, don't waste it. Unfortunately it does not include an expensive and pointless judicial review, that is how New Labour wanted it.

Should you support fight against FSCS? | Opinion | Money Marketing

Should you support fight against FSCS? | Opinion | Money Marketing


Mike Fenwick | 9 Jul 2010 9:08 am

I would like to add 3 separate comments to this thread, which I hope may assist.

Quote: "The fund would need to be transparent and every penny spent would need to be accounted for, preferably to an independent set of trustees."

1: The sums involved in aggregate, and any latent risk that more might be needed do imho call for exactly the form of audit and supervision that Nic is suggesting. I mean no disrespect to Gareth Fatchett, indeed I believe RL's interests are best served by agreeing to adopt just such a proposal. In large part it was it was the lack of such a system that led to the Keydata affair, and it would be a supreme irony imho if lessons were not learned.

2: As is recorded on other threads in this paper, I made a detailed submission to the FSCS before their eventual decision was made, and both the FSCS and the FSA are aware that I intend to prepare a further report on the lessons to be learned. In more recent e-mails shared with Evan Owen, Chris Cummings, Alan Lakey, and Paul McMillan, Gareth Fatchett has been made aware that my involvement may assist in the JR, and may address aspects not yet raised by him. Clearly, whether that is to be the case depends on whether sufficient funds are raised to allow the JR to proceed, but I am happy to place on record that I will assist, if the JR proceeds, and if Gareth eventually deems any contribution from me worthy of inclusion.

3: I placed the "ifs" in the latter part of the above comment, because I believe there is an equally important, if not more important, aspect that needs to be addressed - namely should those affected by the decisions of the FSCS and the FSA be left to wait until they decide when it is time to review the whole system, and then be dependent in any consultation on the terms of reference chosen solely by the FSA?

And by that I do not just mean those who pay any levies, I include as the major priority the ultimate consumer and the taxpayer, for whom the past few years have provided more than sufficient evidence, imho, that the current system devised by the FSA does not do what it says on the tin.

Perhaps, given the costs imposed on each and everyone of us, costs engendered by a failed system of regulatory control, it is time to look for radically different ways to protect the consumer, and the taxpayer?

Perhaps, when you think about it, that is, in the ultimate, the role of independent financial advice?

Thursday, July 1, 2010

FSA ready to crack down on pension rebate deals | News | Money Marketing

FSA ready to crack down on pension rebate deals | News | Money Marketing

Just one item on a long list of things the regulators fail to see.

Change offers a chance for fairer fees | Analysis | Money Marketing#commentsubmitted

Change offers a chance for fairer fees | Analysis | Money Marketing#commentsubmitted

"The outgoing regulator has the opportunity to provide a considered and practical template for the CPMA to build its fee policy and it will be fascinating to see the extent of change that the FSA is willing to introduce."

Those of us who were around during the run up to 'A Day' in 1987, endured numerous 'new improved' regulatory bodies will be forgiven for being unable to accept that anything positive will come from yet another rearrangement of the deckchairs. The fundamental issue is the regulators themselves, the people and their culture, their inablility to listen, to see, to hear.

#commentsubmitted

#commentsubmitted

If this was an IFA, a network for example, the FSA would have ordered it to appoint an 'expert' thingy, KPMG for example.

This is not a simple matter of 'risk error' and if the FSA can't supervise the banks adequately after 25 years what chance is there later on?