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Fay Goddard: Welcome to the new world

September is the busiest month of this year for both the Personal Finance Society and me personally.

The month kicked off with the first of five autumn roadshows, where myself and some of the PFS team are talking to members and non-members about how we operate, what we are doing now and what the future holds for all of us. More important, there is plenty of time for the attendees to ask questions. The first two in Birmingham and Leeds highlighted what has become a recurring theme. Understanding the role of an FSA-accredited body and how to obtain a statement of professional standing are top of the questions coming from the floor, although closely followed by questions relating to the new rules that firms have to adhere to if they want to call themselves independent.

The other popular topic is the application of VAT to adviser remuneration, which was increasingly looking like a Pandora’s box waiting to be opened. The good news here is that HM Revenue and Customs has now confirmed that guidance will be issued for consultation next month and, all being well, we should have it confirmed very early next year. The hope is this will enable firms to decide on their service proposition and method of remuneration with more confidence about what is and is not subject to VAT.

The PFS conference held earlier this month to explore the new rules relating to independent and restricted advice caused quite a stir. This coincided with the release of our professional direction paper, which aims to provide clarity on the new rules. Much of the content of the paper and our conference has been covered in the trade press. The initial headlines were over the FSA speaker’s comment that to be independent, advisers should not rule out non-UK products. This created a furore of comments, some rather extreme, about having to recommend products from the entire world.

Realistically though, what is new? Advisers have been recommending offshore products where they are appropriate for clients for as long as I can remember. The UK regulatory system, combined with the FSCS and FOS, provides consumers with probably the best protection in the world so unless there is a clear reason to advise clients on products outside of that protection, why would you expose them to the additional risk without good cause?

We hope our paper has helped provide a better understanding but it cannot cover every possible scenario and I expect further examples to emerge from the FSA over time as it produces its RDR newsletter and Faqs.

We are all on a learning curve and must continue to work together to take the profession forward. The appetite is there, as shown by the record numbers attending PFS events. And it is not all doom and gloom, the majority of members I am meeting as I tour the country are positive and upbeat about the future.

Fay Goddard is chief executive of the Personal Finance Society


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. “The UK regulatory system, combined with the FSCS and FOS, provides consumers with probably the best protection in the world” – try telling that to the two thirds of savers who lost their entire investment in UK-regulated structured products three years ago when Lehman failed. FSA reported widespread mis-selling, but FSCS does not want to know, and others with FOS cases are stuck in a three year queue.

  2. I agree with Missold. ‘Best protection in the world’, indeed! What tosh. Having lost my entire investment thanks to a structured product which, unbeknownst to me, put all of my money into Lehmans I wonder what protection could possibly be worse. The firm I invested with was registered with the FSA, its marketing literature clearly infringed the FSA’s requirement that it should be clear, fair and not misleading, and yet the spineless FSCS does not consider it missold!

  3. If the UK regulatory system provides the best protection in the world why was I missold my Lehman backed bond and why has the FSCS refused to offer compensation?

  4. If the “Best protection in the world” cannot enforce & deliver restitution for risk averse investors who lost their capital investing in products marketed as providing “100% capital protection on maturity” then help us all….

  5. If the FSA offers the best protection in the world, then prove it, by telling the FSCS to put right a great injustice and pay rightfull compensation to the victims of mis selling, regarding Lehmans collapse. Much alternative legal opinion supports 100% the position of the victims so come on FSA lets see you do the decent thing.

  6. In view of the above posts, it is clearly remarkable that despite the FSA’s own report on the gross mis-selling of SCARPS and in particular Lehman’s backed products, that FSCS refuses to accept the revelations and decisions of its own Regulator, and incredibly compensates some Plan investors whilst refusing others, despite identical text and Risk Warnings in the Plans. If the Warnings are sufficient and adequate, then they are so for all. The FSA stated that the Plans failed the FSA’s industry test that they must be ‘fair, clear and not misleading’. So if this bizarre situation is the best protection in the world it can only be against a kafka like standard. Incredibly some of the less well protected have been refunded in other countries, albeit angry and aggressive mass protest was the trigger. Perhaps a mass invasion of FSCS is needed to force it to face reality, as it is totally insular and not regulated, apart than by its Regulator which it ignores.

  7. Why is the FSCS being so inconsistent with claims against Lehman-backed structured products? I thought they were set up to protect the consumer, but they seem to be protecting the financial industry instead. Why is there no regulator of the FSCS? The only means of appealing an FSCS decision is to appeal to the FSCS themselves. This seems to be against the spirit of their purpose.

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