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.