What a pig's ear our politicians have made of our business. It was inevitable that this would happen when the motley crew that constituted Miboc came on all heavy with all their embryonic rulebook.
At the newly formed Securities & Investment Board, the hostility to practitioners was pretty evident when even the most conscientious practitioners found themselves falling foul of the early minutiae in the rulebook.
Under the self-regulating regime of the day, ordinary practitioners had little or no say in the formulation of the rulebook and bad went to worse as time went by.
As an overlay to this self-destructive regulatory bunch, we had the constant uninvited intrusion from the OFT who, under the leadership of various incumbents, thought it was great sport gunning for financial advisers of whatever hue.
The first retrograde step was to pour scorn on and subsequently dismantle the maximum commission agreement, again throwing the whole remuneration process into chaos.
Meanwhile, ever more complex objectives were being set by the strange breed of visionaries that the regulatory bodies seemed to attract.
Anyone with any kind of common sense who accidentally made it to the pinnacle of the regulatory hierarchy was soon undermined and jettisoned prematurely.
Remember David Walker and his attempts at simplification with the core principles that were meant to replace the encyclopaedic volumes that his predecessors has presided over?
Since 1988, the perception of our role within the industry has also been recast. For starters, the ugly title of IFA was created and, overnight, all life insurance salespeople became financial advisers. With a title like that, could we do anything as lowly as selling? Hell, no.
The rules and practices now needed to be changed so as to mimic other “professions”. But instead of emulating the accountants, we were led into reproducing the practice and procedures laid down for solicitors.
Where do you think that the Investors' Compensation Scheme concept came from? All claims made against solicitors were picked by the Law Society through its solicitors indemnity fund and then divvied up and allocated to all legal practices in the land.
As most appointees to our regulatory bodies were heavily legally biased, it was deemed only fair that we absorb the compensation costs among us. Fair it was not but what do legal bods know about equity?
Of course, our whole legal system is based on common law precedence and equity but I doubt that anyone has actually tested the compensatory system for its equitable content.
Subsequent stages in the corrosion of the world of financial services owe their origins to the wacky concepts that pandered to the eggheads in the regulatory loop.
As intermediaries sold life and pension policies, they should be educated to the level of actuaries.
If a financial product was ever used in tax planning, then they should be as well informed as lawyers or, if any figurework was involved, then they should be qualified as accountants.
What about those who fall between stools and cannot afford to buy that investment product or life or pension policy?
Ah, then we should ensure that our intermediary is a fully qualified benefits agency adviser so that the lower-paid can seek their advice for “free”.
Capital Financial Services,