A plank for the establishment of the FSA was to protect investors and, we hope, all other operators within the insurance industry. As far as IFAs are concerned, they have no powers to do so any longer.
The environment which encouraged and presided over the pension review into so-called misselling was a total abuse of position and authority without regard to matters of integrity and fairness.
That spirit pervades the FSA in its misdirected zeal to protect the investor.
The result is that many IFAs have been bankrupted because their clients were invited to take them to the cleaners, invariably with no justification.
Those IFAs who remain either have no PI insurance or, at a vastly increased cost, have totally inadequate PI insurance.
The FSA happily sends guidance “to deal with this situation”, which is not rooted in the real world. It now seems that they have no alternative but to accept that IFAs are trading without PI insurance or without compliant PI insurance – and they can do nothing about it.
Where an IFA continues to trade without compliant PI cover, the FSA has the right to withdraw their licence and put them out of business. However, as IFAs are unable to obtain compliant cover, the FSA is unable to protect the investor or the industry.
This is the inevitable conclusion from the lack of integrity in the pension review. The mentality which the FSA was appointed to correct was that mentality which has no scruples, honesty and integrity.
As an IFA, I have a lifetime vocation to look after my clients. In order to be able to do that I could not get away with any lack of integrity towards my clients.
The biggest disservice which Howard Davies has done is to the FSA – who can no longer protect investors by an insistence upon an effective form of PI insurance