Thursday, June 2, 2011

FOS chief praises IFAs' complaints record - New Model Adviser® Edition - Citywire

FOS chief praises IFAs' complaints record - New Model Adviser® Edition - Citywire

This is frustrating, words fail me.
The FSA complains about a lack of feedback, everybody will know that I have been one of the busiest commentators on the unfairness of rules and regulations created by the regulators, well intended of otherwise.
This particular example of unfairness has not received a response, why?
Evan


From: Evan [mailto:evan@.]
Sent: 28 April 2011 11:25 AM
To: 'Treasury Committee'
Cc: 'Hector Sants'; 'margaret.cole'; 'natalie.ceeneyinancial-ombudsman'
Subject: Regulatory gaps
Following the High Court win for common sense in the matter of banks and PPI sales the FSA rightly claims to be closing the gaps with the use of principles.
There is one more gap that the FSA should be closing immediately, this relates to mortgage endowment policies which have either been sold or surrendered and will never be time-barred because the 'guidance' given to the FOS does not clarify the situation when claims come in after the aforementioned events.
Firms cannot time bar a complaint because both events preclude the use of red letters and 'dates' as required by the FOS which slavishly follows FSA rules and guidance, this situation could in effect exist forever and involve retirees having to fend off complaints and pay FOS fees of £500 or more until the day they die, or even until their estates are dispersed after which any claims will fall upon the FSCS which does not recognise the 15 year long stop despite the fact that the Limitation Act has not been repealed.
I hope this gap is closed very soon.

Monday, April 4, 2011

Selling out: Why everyone is paying for bad advice, the real fuss needs to be over FOS - Investing Strategy - Mindful Money

Selling out: Why everyone is paying for bad advice, the real fuss needs to be over FOS - Investing Strategy - Mindful Money

I have every sympathy for adviser firms who feel they are paying for the acts or omissions of others but that is what they signed up for in 1998, the 'new' PIA contract was the precursor for the Financial Services and Markets Act 2000 and the one size fits all regulator. Many advisers left the industry rather than sign this contract and the firms which did and any firms and advisers who have become authorised firms since then have only themselves to blame because as was predicted in 1985 by Mike Fenwick this has in effect become your prison, you will eventually pay for damage done by others even if you never have a claim made against you. The bill for this is increasing each year yet the number of firms who share the burden is reducing, this situation can't last forever can it?

That is the nature of the beast you either put up with it or leave, you have a choice. If you stay you must get involved in designing the next regulator, all practitioners should get involved or else it will fail to meet the expectations of consumers and advisers alike just as the previous regulators have. Are the politicians, the elected Executive, happy with the failure of regulation on so many occasions?

I would also like to ask why we have claims in the first place, often it is because the regulators see something they missed previously, they point, fine and ban after the damage has been done. So, is it regulation that has failed society or is it the regulators, the people? Then we have investors taking more risk than they would if there wasn't a scheme established by government which 'guaranteed' recompenses for any losses.

It hasn't worked, it isn't working and it will never work.

Sunday, March 27, 2011

No win, no fee firms eye mis-sold mortgage compensation market | Money | The Observer

No win, no fee firms eye mis-sold mortgage compensation market | Money | The Observer

"Citizens Advice also advises homeowners to think twice before unnecessarily signing up with a claims company. "Up until 2008 we were seeing lots of evidence of irresponsible lending – people being lent mortgages they could never properly afford and unsuitable lending with people being given products that weren't necessarily right for them – and a lot of the problems were driven by intermediaries," says Citizens Advice's social policy officer Peter Tutton. "It was only a matter of time before the claims management industry started moving in."

An FOS spokeswoman points out that its complaints service is free if a consumer has first made a complaint to the lender or intermediary but is unhappy with the response: "Consumers don't need to pay to get their complaint resolved. If they choose to use a claims company, or other third party, the ombudsman service will deal with the complaint in exactly the same way."

If only it were so simple. Many people are unaware of the problem.

http://www.saverjustice.co.uk

Thursday, March 24, 2011

The cost of advice - and what you need to know - Investing Strategy - Mindful Money

The cost of advice - and what you need to know - Investing Strategy - Mindful Money

I joined the financial services in 1985, it was like the Wild West back then!

Naively I welcomed regulation in 1987, I thought it would get rid of the cowboys but they rode on by as if nothing had happened.. I should have read what Mike Fenwick was saying, so should everyone else.

The rest is history.

I tried to defend IFAs via the IFA Defence Union, many were indefensible. Now I am regulated by the Ministry of Justice in respect of regulated claims management activities, consumer detriment is big business and I know this one inside out, I hadn't realised how big until recently. Around half of the claims I handle are against advisers who are already RDR compliant, they charge fees, they have all the qualifications but they still make a hash of it.

The regulators tell me they don't have the 'resources' or the 'tools' to do the job so they keep making new rules and regulations with yet more gaps, unfortunately the incompetent, the negligent and the downright unscrupulous will carry on as before.

In my ever so 'umble opinion the only thing the RDR will do for consumers is reduce choice, for me it will be easier to find more large cases than before. I am grateful for the work but I feel sorry for the consumers, particularly those who fail to complain or have their complaint fail without just cause.

Wednesday, March 23, 2011

FSA chief Hector Sants sees pay package soar | Business

FSA chief Hector Sants sees pay package soar | Business

How will the FSA staff be integrated with the BofE when they earn so much more?

Break-up plans force FSA to accept limits - Business News, Business - The Independent

Break-up plans force FSA to accept limits - Business News, Business - The Independent

Head count 4,000!!! Good grief, there will never be enough adept regulators to do the impossible, preventing consumer and taxpayer detriment that is, they may mean well but they can't see the wood for the trees. For example, it is sad that they feel so unpopular that all visitors have their bags scanned for weapons and explosives, until recently they hadn't thought about the possibility that such items could be hidden on the person. Sums it all up really.

Regulation as we know it is doomed to failure time and time again, we hear that lessons are learnt but we see no evidence other than more and more rules and regulations, and the gaps in between.

Anybody remember the Snoopy cartoon? "Nobody listens"

Thursday, March 17, 2011

No silver bullet to prevent financial crises, says FSA chairman Lord Turner - Telegraph

No silver bullet to prevent financial crises, says FSA chairman Lord Turner - Telegraph

Is regulation the cause of financial crises? We see regulation (and regulators) increase in number daily while each crisis gets bigger than the last one. So, what is the point of it all? It doesn't seem to matter how big or how powerful the regulator is it can't stop the crises. I am sorry to have to disappoint you Adair but it hasn't worked, it isn't working and it won't work because you don't listen, hence the "Collective Intellectual Failure" described by Clive. Where is he now?

I thank you for supplying people like me with new business, consumer detriment will be paying my bills until I breathe no more

What next for the FSA? - Telegraph

What next for the FSA? - Telegraph

Unless they replace the Financial Services and Markets Act 2000 I can't see how it will work effectively, all sticky tape and elastic bands. It is a badly drafted Act which was thrown together in panic, 1,200 amendments with little Parliamentary scrutiny and at the 12th hour guess what..... a Henry VIII clause! And what is more it is in conflict with other legislation...

Sunday, March 13, 2011

Sunday, February 27, 2011

Investors charged rip-off fees - Telegraph

Investors charged rip-off fees - Telegraph

20% of the capital sum went in commission?

I find that figure to be excessive in the extreme, no I would contend that your memory has faded or your forgettery has increased substantially in size.

If you have the evidence which supports your public statement please send it to Paul Farrow or retract the statement in its entirety.

No, seriously, I do accept your suspicions and the urban myths which surround, and cloud, the advice process but making sweeping tatements in public which are not based on the situation as a whole, as Alan Steel does quite regularly, is putting more doubt in the minds of people who might benefit from advice which is not a single shade of grey as is the case at a bank branch. It is unhelpful - unless you are promoting your own self interest of course.

Yes there is 'commission bias' but there is also 'fee bias' or 'fee building' as it is called. What is the answer? The government proposes 'simple products' without considering that such products can become very complicated if bought by someone who either doesn't understand them or more importantly doesn't really need them, particularly when their circumstances change in future as they surely will.

Friday, February 25, 2011

Fund management chiefs call for Keydata inquiry | News | Money Marketing

Fund management chiefs call for Keydata inquiry | News | Money Marketing

There is no substitute for effective supervision, an ability to spot 'trends' early on and the the gumption (inc. powers and tools?) to move quickly.

To date the regulators have had limited resources aimed at perceived risks, they haven't had the correct tools for the job nor have they employed people with 'native' intelligence. They are like bomber pilots, they never see the full scale of the damage caused because they are too far away from the action.

Unfortunately I don't see much change happening under the FCA, I may be wrong but the future of regulation doesn't look too clever, if Mike Fenwick says it isn't going to work then I will agree wholeheartedly.

This should be built from the ground up.

Tuesday, February 15, 2011

Those to blame should pay the FSCS price | Opinion | Money Marketing

Those to blame should pay the FSCS price | Opinion | Money Marketing

John Ellis, if this is the man I am thinking of he should know all about the theories of civil servants. They are just theories which often cause us problems in future by which time they are doing something else altogether, like enjoying their vast pension pot.

Mike Fenwick warned of this in the 80s and those in power at the time said they would 'keep the letter on record' which was absolutely the wrong thing to do, not listening is still not the right thing to do.

The number of people with opinions which are being published makes this paper look like a platform for professional complainers. Everyone is looking for a solution but they are looking in the wrong places!!

Tuesday, February 8, 2011

Four hard lessons from the Barlow Clowes scandal - Telegraph

Four hard lessons from the Barlow Clowes scandal - Telegraph

What have we learned from Barlow Clowes and all the other failures which appear to increase in size at the same rate as the regulators do?

I don’t know about you but all the evidence suggests that regulation is bust. All the rules and regulations in the world are no substitute for effective supervision, an ability to spot trends and the gumption to move quickly in the right direction.

Until regulation works as we would expect it to we will continue to see ever larger failures

Tuesday, February 1, 2011

Rathbones faces £3.6 million FSCS levy hit - Citywire

Rathbones faces £3.6 million FSCS levy hit - Citywire

If you were a self-regulator would you be any better or, God forbid, worse than the failed statutory regulator? By worse I mean more critical, more intrusive, more willing to push the button simply because what you see before you every day is so obviously in need of some effective supervision that you point the finger well before the regulators as we know them would be picking up the pieces, handing them to the compensation scheme, or the taxpayer, and doing the "point, fine, ban" after the event kind of regulation.

There is a concept called 'mis-selling', it isn't defined in any regulatory glossary. My definition is "compensation for loss howsoever caused", this is the system we see before us. The regulators want to educate consumers, I presumed this was to protect them from their own folly, but is it? During many years of personal research I have found that consumers are not as stupid as the regulators believe they are, I often wonder if the opposite is true!

As far as "raising standards" is concerned I can honestly say that yes there are some people who kan't spel or hold a two way conversation but they have been quite capable of passing exams in the past, no doubt they will pass the next lot, and the ones after that.

All the rules and regulations in the world are no substitute for effective supervision and a credible CPD system.

You, all of you, can make sure the next reinvention of the regulatory wheel is the final one. Some of you may not like what is possibly the most radical solution on the planet but it is simple, it would work from the ground up and it would be cheap. Unfortunately the regulatory job creation machine wouldn't like it either, too many people in well paid jobs dreaming up more and more ways to increase the burden of the 'pileometer', remember that?

Sorry about the incomprehensible rant, my simple mind has too much to think about today.

Sunday, January 30, 2011

Lord Turner: banks face more rules and regulation - Telegraph

Lord Turner: banks face more rules and regulation - Telegraph

Adair

I hope you will not be too disappointed to hear that I don't agree with you. All the 'rules and regulations' in the world are no substitute for effective supervision, an inate ability to spot 'trends' and the gumption to move quickly instead of ending up with the usual 'point, fine, ban' after the event regulation we have had to endure for two decades.

The UK has not been served well by the regulatory musical chairs, time for new blood and a regulator which is not influenced by politics.

Monday, January 24, 2011

Banks challenge PPI reclaiming in High Court

Banks challenge PPI reclaiming in High Court

Where have the banks been all these years, retrospection is what this compensation machine is all about. However I can't see how what they did was acceptable at any time in history.

Sunday, January 23, 2011

Was Barclays mis-selling? It's hardly a million dollar question - Telegraph

Was Barclays mis-selling? It's hardly a million dollar question - Telegraph


Hi Paul

The only thing wrong with this piece is the title, it uses the word 'was'.

One more point, this isn't the exclusive preserve of Barclays is it?

Oh, a few more points, this wouldn't have happened if:

1. The FSA hadn't brought in 'depolaristation'
2. The FSA had more than six people supervising the bank.
3. The government at the time hadn't put pressure on the regulators to let the banks regulate themselves.
4. The FSA had been more proactive with regard to 'provider influence'.
5. Barclays had a decent 'risk consultant', me for example.

The rest is history, or is it?

I have a few cases here which could make headlines soon.

Thursday, January 20, 2011

Judicial review is a symbol of discontent | Opinion | Money Marketing

Judicial review is a symbol of discontent | Opinion | Money Marketing

This has become your prison, and theirs.

As in all prisons the inmates sometimes attempt to escape, is it morally acceptable so see the innocent ones try to be free of persecution and fail? Is it fair to give them a good kicking because 'we told you so', hindsight is a wonderful thing but it is the preserve of the regulators so stop whining and make sure the next incarnation of the regulator is fair and reasonable right down to the bone.

Who do you want to do that job this time around? The same old same old?

Tuesday, January 18, 2011

The FSA's flawed argument | Opinion | Money Marketing

The FSA's flawed argument | Opinion | Money Marketing

From where I sit regulation as we know it looks like what would happen to Teddy if a child found a big box of elastoplast. Rulebooks cobbled together, rules added, deleted or amended at will when they don't work.

More and more rules are no substitute for effective supervision, an ability to spot 'trends' and the will to move quickly. Isn't that what regulation is all about? All we have is a compensation machine picking up the pieces after the houses of cards fall apart. A compensation scheme which encourages consumers to take risks they wouldn't normally consider, it has got so bad, or mad, that the FSCS is now advertising on MTV...

Tuesday, January 11, 2011

FSA's RDR data built on hills of sand | Opinion | Money Marketing

FSA's RDR data built on hills of sand Opinion Money Marketing


If you poke a snake it strikes back. What we are dealing with here is the leftovers of the New Labour administration which didn't take kindly to the converyor belt of criticism and their answer was to eradicate the source which was the likes of myself and before that Garry Heath. For my sins I now look at things dispassionately, not as a regulator, not as the regulated and not as a consumer but as an observer and the view from here is quite stunning at times. The FSA is about to be split in two, that may be a good thing if the CPMA is a much better supervisor and pots 'trends'.

I can see where the FSA (via HMT policymakers) was coming from with the RDR, albeit in part, but making more and more rules is not the solution to problems caused by ineffective supervision.

Friday, January 7, 2011

Sants tells MPs that misselling costs the public £600m a year | News | Money Marketing

Sants tells MPs that misselling costs the public £600m a year | News | Money Marketing

I doubt that anyone knows how much damage is caused by lousy advice, just before Xmas a widow came to me with a horrendous tale, in less than a year she had lost £380,000 from what was supposed to keep her and the children in the manner to which they had become accustomed until her GP husband passed away at a young age.

If the FSA had been on the ball this might not have happened and to make matters worse the firm is still being allowed to trade! The people running this firm are highly qualified crooks.

Most of what the FSA is using as evidence in support of the RDR might have been avoidable had the regulators been able to spot the 'trends' created by changes in legislation such as 'break free from those chains of your occupational pension scheme', this is where the supervision by the regulators has been absolutely abysmal, the damage caused to the UK is all down to a lack of vision and coordination. The rest is history but we are still paying for it and so will our children and their children.