The then regulators lamentably failed to regulate Equitable Life. I quote from Ann Abraham, who says there was “serial maladministration on the part of the former Department of Trade and Industry, the Govern-ment Actuary’s Department and the Financial Services Authority”.
Most recently, the FSA has shown the same total failure in carrying out their duties in protecting the public from themselves and the excesses of the banks and lending institutions.
They failed to insist that the public prove their income, which would have saved them from their own greed and profligacy.
They failed to stop the banks and lending institutions from using increased income multiples to absurd levels that allowed the public to borrow far more than they could afford.
They failed to stop the banks and lending institutions from using imprudent LTV ratios and in some cases providing 125 per cent LTV mortgages.
They failed to stop the banks and lending institutions from what is euphemistically called securitisation, which in reality is bordering on massive fraud, given that these organisations do not know what their debt exposure is or where the greatest risk exists within these financial instruments.
Let us try to look at the “positive” side. We have innumerable consultation and discussion papers each year, an increase in regulatory fees far in excess of inflation yet again, the RDR and TCF.
Neither the RDR nor TCF initiatives have been looked at on a cost/benefit analysis but they are going ahead in one form or another regardless of whether they are going to be beneficial to the public or adviser.
I think that the icing on the cake was when the person claimed to be responsible for the Northern Rock fiasco was given several hundreds of thousands in a severance package, which we have to pay for.
The emperor’s clothes’ syndrome comes to mind, where no one will admit that the FSA costs a fortune and seems to be achieving nothing that can be considered really effective other than their own continued existence.
They want to micro-manage advisers without really understanding what it is we do and our relationship with our clients (not customers).
When there is something really important that will definitely impact on the public, they not only fail to do something but also do absolutely nothing at all.
It does beg the question, do we really need them in their present, very expensive form?
DPB independent Financial Services