Friday, October 30, 2009 / Personal Finance - Redundancy insurance terms ‘unfair’ / Personal Finance - Redundancy insurance terms ‘unfair’: "“Most PPI policies will not cover you if you have specific knowledge about the circumstances of your employer that increase the likelihood of redundancy,” said an ABI spokesman.
“Some firms ask a specific question about this in the application form. It is important that people understand this before they take out the policy. The policy summary document should make it clear what’s covered and what’s not.”"


IFAs have always avoided these policies because you would need to be dead from the neck down in order to qualify for any benefit and even then it would depend upon how you became so disabled and after all this any benefit would be paid for a very limited period.

A waste of money all round?

Thursday, October 29, 2009

Fitch blasts FSA's plans to reform home loans - Telegraph

Fitch blasts FSA's plans to reform home loans - Telegraph: "Fitch, one of the world’s most influential ratings agencies, said that the reforms proposed by the Financial Services Authority (FSA) could result in higher costs and greater inefficiencies in the mortgage market."


Is it not the case that these 'policy' reforms were actually proposed by Her Majesty's Treasury and handed down to the FSA for implementation?

As is aoften the case teh regulators have to take the flak for the work of teh govrenment which has the evidence that lenders were acting irresponsibly for a relatively short period, before that, and since, the mortgage market in the UK has been the most efficient, the most competitive and diverse in the world. Until some fools decided to import the US system of giving loans to people who could never repay them.

Do the policy makers want the rest of society to pay for the acts or omissions of a few bankers? Have we not paid enough?

Wednesday, October 28, 2009 / Comment / Letters - Osborne is more interested in short-term tactics / Comment / Letters - Osborne is more interested in short-term tactics: "His initiative on curbing bankers’ bonuses, which fell apart on minimal scrutiny, is but the latest to draw fire from City and business leaders. It was attacked not for being tough, but because it was not thought through."


"Not thought through", as in the breaking up of the FSA?

As in the FSA's Retail Distribution Review?

Is anything thought through? Or are we (the UK) in such a terrible mess that they (the politicians) cannot make it any worse?

Wednesday, October 21, 2009 / Comment / Editorial - Testing times for bank regulators / Comment / Editorial - Testing times for bank regulators: "This would make it dearer for large banks to place risky bets than for smaller ones whose failure would not pose a threat to the financial system."


Not so long ago there were lots of small institutions, they were swallowed up by the bigger ones. / UK / Politics & policy - Osborne names financial regulation team / UK / Politics & policy - Osborne names financial regulation team: "Participants at the meeting said it felt like a charm offensive by Mr Osborne, who praised the FSA’s work. One said: “He was pretty straight and direct. But he was clear that some things are not set in stone.”
In particular, Mr Osborne signalled he was “listening” on the issue of “integrated supervision”. The FSA operates teams of integrated regulators, governing both prudential and consumer-focused supervision, for specific banks and has argued that it would be tricky to unpick those teams.
According to one person at the meeting, Mr Osborne expressed a willingness to allow integrated supervision of big institutions, including consumer supervision, to pass to the Bank, rather than be hived off to the new consumer protection agency that the Conservatives want to set up."


Politicians act in haste, the rest of us repent at leisure.

Tuesday, October 20, 2009

Osborne Said to Tell FSA He Will Fulfill Vow to Shut Regulator -

Osborne Said to Tell FSA He Will Fulfill Vow to Shut Regulator - "Osborne met about 70 officials at the agency’s Canary Wharf headquarters in London yesterday to discuss plans to dismantle the body and transfer its functions to the Bank of England, according to one of the people who was at the meeting."


Will Mr Osborne create more regulatory gaps than he hopes to fill?

Osborne Said to Tell FSA He Will Fulfill Vow to Shut Regulator -

Osborne Said to Tell FSA He Will Fulfill Vow to Shut Regulator - "Conservatives blame lax regulation of banks at the FSA, established by the Labour government in 1997, for exacerbating the financial crisis and forcing the U.K. Treasury to rescue (the banks)"


We don't agree, the problem lies with state interference of regulation, it should be completely independent of HM Treasury as was promised when the FSMA 2000 was being debated.

As for Michael Foot... / UK / Economy & Trade - King calls for break-up of banks / UK / Economy & Trade - King calls for break-up of banks: "Mr King borrowed Churchillian language in a speech in Edinburgh to highlight the burden banks had placed on taxpayers. “Never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.”"


Strong words Mr King, but so true.

FSA will not apply RDR to mortgage market | News | Money Marketing

FSA will not apply RDR to mortgage market | News | Money Marketing: "“The characteristics of mortgages can be compared in advance and do not rely to the same degree on inherently uncertain judgments about the relative rates of return and risks from investing in different assets.”"


Dear me. Should all advisers whether they be investment, mortgage, protection or insurance intermediaries be required to complete a full fact-find? If so don't they need to know a little about everything they may come up against? When I was an IFA mortgage affordability was a complex issue involving all my client's affairs, all pensions and savings were taken into account as were their unsecured debts. If a client had a duff investment I would recommend using that money to reduce the mortgage requirement or pay off other more expensive debts. The FSA should treat carefully with the mortgage regulation changes passed down to it by HM Treasury this week.

Lib Dems push for stakeholder mortgages | News | Money Marketing#commentsubmitted#commentsubmitted#commentsubmitted#commentsubmitted

Lib Dems push for stakeholder mortgages | News | Money Marketing#commentsubmitted#commentsubmitted#commentsubmitted#commentsubmitted: "“It is critical that a simple and safe ‘stakeholder’ style mortgage as the Liberal Democrats have proposed is introduced.”"


I used to hold Vince in high regard but more frequently of late I find comments such as this to be naive, as are the mortgage regulation policy proposals HM Treasury has handed down to the FSA for implementation, the problem is not the products but what the lenders used to do with the packaged loans. Bundling bad debt and selling it, or finding a mug to buy it, absolves the underwriter of the loan from any liability for future default when it should not, that is where we had one of those 'collective intellectual failures' Briault mentioned recently. There are many others to come including those created by recent policy announcements by the HMT/FSA team.

Oh, I forgot about the Conservative plans, unworkable in practice.

Regulations is in dire need to balance, when will we see some?

Monday, October 19, 2009

FSA mortgage review: industry reaction - Telegraph

FSA mortgage review: industry reaction - Telegraph: "Lord Myners said: 'Irresponsible lending helped fuel the credit crunch and also drove up house prices, making it tough for first time buyers to get into the market. This was a problem right across the world."


Dear Mr Myners

The products were not to blame, it was what the lnders did with the mortgages after the event, they 'securitised' them and sold them on which meant they felt able to take ever higher risks in the knowledge that when the muck hit the fan they were in the clear.

This 'Ponzi' sheme was imported into the UK two decades ago but it didn't catch on until Northern Rock's main man had a few brainwaves and lost the plot, he got away with it too, but we taxpayers didn't!!

As with any crisis there is a root cause which was missed because of a "collective intellectual failure" to see outside the proverbial box.

All problems have a solution but in this case we may simply have another "collective intellectual failure" instead of root and branch reform of the system from HM Treasury down.

Yours faithfully


Government steps lightly around ‘minefield’ of windfall bonus tax - Times Online

Government steps lightly around ‘minefield’ of windfall bonus tax - Times Online: "The Government could introduce a law that caps bonuses at a fixed amount or imposes greater restraint through new guidelines. This would mark a U-turn for the Treasury and the Financial Services Authority (FSA), the City regulator, which have said that it was for the private sector to set remuneration."


If it takes skill or an uncommon ability to earn your employer large profits (legally) then the person who does so should be remunerated in a way that retains that person for future profits.

An example of government interference in remuneration is the RDR proposals to ban commissions for anyone but the representatives of the banks and the insurers. We believe this is unwarranted interference in competitive markets and fails to recognise the ability of some advisers who are capable of persuading consumers to save for the future thereby reducing the burden on the state.

Friday, October 16, 2009

David Wilshire to stand down over £100,000 allowances paid to own company - Times Online

David Wilshire to stand down over £100,000 allowances paid to own company - Times Online: "Ms Harman told MPs that it would be “arbitrary” to apply different rules and standards than those that fixed at the time. She said: “There is a three-week period in which members can respond to Sir Thomas. If they think there is an inaccuracy in his proposal or they think he is not judging them by the rules and standards that obtained at the time, no doubt they will point that out. Obviously we have to judge things by the rules and standards that obtained at the time. ”"


MPs, welcome to our world, a world apart from the law of the land. Enjoy!!

Wednesday, October 14, 2009 / Columnists / Lombard - FSA is diving too deep into the interview process / Columnists / Lombard - FSA is diving too deep into the interview process: "Nobody can deny that some of the wrong people ended up running British banks during the good times. But in adjusting its over-trusting attitude to appointments, the FSA has swung too far in the other direction. This is not only time-consuming for supervisors but potentially counter-productive."


Nobody can deny that:

The wrong people ran the banks, and other institutions, they still do.

The 'non-execs' are incapable of asking the right questions and demanding the right answers.

Unless the regulator is allowed to be deeply 'intrustive' the old boy's network will be back in action, it it isn't already. However, the same network appears to control the regulator, the 'Masters of the Universe', McKinsey. Or is it a case of it used to be??

Tuesday, October 13, 2009

Gordon Brown's authority in crisis as Labour MPs defy him on expenses - Telegraph

Gordon Brown's authority in crisis as Labour MPs defy him on expenses - Telegraph: "Ann Widdecombe, the former Tory minister, also hit out at the way Sir Thomas had been allowed to change the rules retrospectively. She said: “If any other employer did this, he would be up before a tribunal.”"


If the MPs need a 'tribunal' they should try the Financial Ombudsman Service (FOS), the FOS applies eveything retrospectiveley without any of the time limits afforded by common law, or natural justice as some describe what everyone else receives but those regulated by the Financial Services Authority (FSA) or 'previous regulators' do not.

And what makes us mad is that these MPs actually voted for the Financial Services and Markets Act 2000 which imposed this regime which is in breach of human rights, Article 6 in particular.

One rule for them and another rule for the rest of us.

Monday, October 12, 2009

Tories want to put Lord Turner in charge of curbs at the Bank - Times Online

Tories want to put Lord Turner in charge of curbs at the Bank - Times Online

Mr Osborne must stop and think about all this, the fact is that all the 740 BofE regulatory staff were transferred to the FSA (together with their generous pension scheme and decrepit computer system), yet the banking system fell over despite the fact that we had all these experienced individuals in the 'one stop' regulator, I believe it was down to the fact that a new government made hasty changes for the sake of change and the desire to be seen to be doing something about the perceived faulty ‘previous’ regulators under a ‘previous’ government’. These knee-jerk reactions are not vote winners, the regulated are worn out by constant change over the last two decades or more, we need stability, we need to sort out what we have rather than create something ‘new’ which will inevitably be populated by the very same people who have to date allowed so many things to fall in between the regulatory gaps. Another issue is the cost to the regulated of returning all those people to the state run central bank, they can’t afford it!

No Mr Osborne, we need balance, we don’t need yet another stab at ‘curing’ the system of regulation which, let’s face it, was started on the watch of the last Conservative government.

While I am still interested enough to keep tying I would like to ask whether regulation is the solution, or is it the problem.

Sunday, October 11, 2009

Boris Johnson warns EU to keep out of the City - Telegraph

Boris Johnson warns EU to keep out of the City - Telegraph: "However, Poul Rasmussen, president of the Party of European Socialists and former Prime Minister of Denmark, said that the EU was right to push for stronger regulation.
'The hedge fund industry is arguing that there's no need for better regulation,' he said.
'This flies in the face of the evidence and also goes against the consensus achieved in the G20 with Obama's administration and the EU on the need for tougher rules.'"


Secretive and potentialy dangerous investment companies are in need of scrutiny, keep up the good work Mr McCreevy.

Friday, October 9, 2009

FSA No.10 Petition - your vote counts!

FSA set to destroy independent financial advice
for all but the wealthy

Please excuse the general nature of this email sent to all in my address book but this is a matter of substantial importance to all UK taxpayers and their families. There is not a man, woman or child in this country who is not worse off today thanks to what the banks have done, through their recklessness, and through what the Financial Services Authority has failed to do by not regulating them properly. In addition we will all be considerably worse off in the future for the same reason. Our taxes have been used to bail out the banks and the Government has been forced to borrow - in our name - to fund the rescue of this country's financial system. We, our children and grandchildren will have to pay for the recklessness and greed of those who have irresponsibly ruined the UK's banks.

Despite this fact, the FSA, through its so-called Retail Distribution Review, is proposing measures that will leave most consumers of financial services at the mercy of the very banks responsible for this debacle.

Lord Turner of Makebelieve is at it again. The FSA is introducing new rules for Independent Financial Advisors (IFAs) that will probably drive half of the 20,000 or so IFAs out of business by 2012. The requirements of the FSA's new Retail Distribution Review (RDR) will make life impossible for the independent adviser. Ironically, the FSA is supposed to protect the consumer from biased financial advice and yet the Retail Distribution Review will drive all but the wealthy clients into the arms of the same big banks who are responsible for most consumer complaints. 59% of these complaints are about banks as against 3% complaining about IFAs.

Once again the FSA is seeking to destroy the UK financial services sector rather than improve it. The FSA is failing effectively to regulate the big banks and driving more consumer business into their arms. Not, of course, that advice from your friendly banker is ever biased.

PETITION: Many in Financial Services now believe FSA policies have and will prove disastrous to both businesses and consumers alike - we invite you to sign the following no confidence petition:


Further Comment

"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."

Martin Lewis, Money Saving Expert, June 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."

Janet Walford OBE, Editor Money Management, Sept 2009

"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."

Peter Hamilton QC


Best regards

Simon Mansell BA (Hons) Law
(Managing Director)