Several years ago, on a visit to my tailor, he measured me carefully and discussed the sort of style that would be appropriate for my envisaged usage. After a few weeks, the suit was finished and I was delighted with it.
However, I wonder today if I was missold? The lapels were four inches wide, the trousers had 22-inch bottoms and the waist and jacket are now too tight. Should I to complain to the Tailors' Guild and ask for redress?
Likewise, several years ago, somebody bought me a very beautiful pair of silver hair brushes for which I presently do not have much use. Ought I to take them back and ask for the return of my money?
I hope this illustrates the point I am trying to make.
I am hardly a champion of the regulator but I suspect that it is hostage to the Government. Everything changes in life and what may have been suitable in one year may be totally useless a few years down the line. It is not a matter of misselling, it is a matter perhaps of careless management.
If the regulator is guilty of anything, it is perhaps guilty on two points. The first could be called arrogance, in so far as it seems to believe that every possible client is a completely uneducated, illiterate moron. You only have to look at the terminology in which it wishes us to word things for clients. If this is who it thinks our clients are, it is under a sad misapprehension because these sorts of people will never buy financial services products.
This approach appears to be a politically-correct Government-motivated agenda.
The regulator's second problem is that, instead of looking at the broader issues, it spends vast resources and time working out what forms can be foisted on clients to ensure they are safeguarded. This is a bureaucratic approach. Box-ticking and paper snowstorms will not by themselves help the problem and may even possibly make it worse.
The regulator has probably never asked to have such a behemoth to manage, with a remit so wide that it beggars belief. Is it surprising that it has an uphill struggle?
Just as wider industry fashion oscillates between the love of the very big and the recognition that sometimes small is more beautiful, perhaps in the future we will see some sort of return to the previous system whereby different types of outlets are regulated separately by smaller, more manageable entities.
But this is process rather than outline and the outline which seems to flow logically from the foregoing points is that:
The process of effective regulation must concentrate on stopping trouble before it starts in as straightforward and uncomplicated way as possible.
Perhaps products should be vetted before a licence to distribute them is obtained. These products should then be monitored on an ongoing basis in the light of changing legislation, economic conditions and tax rules.
Instead of trying to educate those who do not want to be educated, the regulator could then brief the press and/or the providers on advising the public to review what they may have purchased four or five years ago and explain how to ameliorate any effects that may be deleterious to the originally envisaged outcome.
The current ethos seems to rely on checking what ought to have happened after things have gone pear-shaped. For example, how will the regulator monitor which menu an IFA client receives or, indeed, if every piece of paper is sent?
The answer is that, on an ongoing basis, it cannot. This would only really be checked in the event of a physical inspection and/or asa result of a client complaint – in other words, after something has gone wrong.
The more complicated and involved the processes, the more scope for taking advantage of loopholes by the regulated and the greater the difficulty of enforcement by the regulator. This is hardly ideal.
If, by now, people reading this form a consensus that perhaps there is some merit in the foregoing, please do not get too excited. Unfortunately, as I mentioned in my opening remarks, the regulator would seem to be hidebound by political agendas and, unfortunately, as we all know, Governments and politicians have one overriding attribute – mendacity.
This Government appears more mendacious than most. If we are therefore to move forward, ought we not to try and ensure that our regulator is truly independent and free from pressures and constraints from the Government and the Treasury?
Then – and only then – will we probably get genuine regulation where the remit will not only extend to product manufacturers, providers and retailers but the regulator will also be in a position to criticise Government policy that runs counter to the interests of consumers, as the Bank of England is able to do.
Balanced and effective regulation will then perhaps have been achieved.
Harry Katz Norwest Consultants,Stanmore,Middlesex