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FSA playing by a different rulebook

Money Marketing’s front-page articles last week have prompted me to write. I do this with some trepidation as within 24 hours of the last time I dared to raise my head above the parapet criticising the FSA and asking difficult questions, I was told by my network that the FSA had contacted them, stating that they wanted to pay me a visit.

I have nothing to fear from a visit from the FSA but, on that occasion, I raised the question of this seeming coincidence on the Finserv forum and in various other public quarters and, lo and behold, two days later, the FSA again contacted my network, saying they had changed their minds and no longer wanted to visit.

The above notwithstanding, I feel it is my duty as a concerned and responsible member of the financial services profession to ask questions and raise issues that do not yet seem to have been dealt with by the comments in the articles.

It seems to me that the key question is one of honesty, trust and integrity. The FSA’s statutory objectives include “market confidence” (maintaining confidence in the financial system) and “consumer protection” (securing the appropriate degree of protection for consumers). Yet there appears to be one set of rules for the FSA and quite another for those that the FSA is supposed to regulate.

Your articles make it quite clear that the FSA clearly failed in its statutory objectives. How this can be deemed to be either maintaining market confidence or consumer protection completely escapes me.

The FSA’s website states: “Where we interpret the objectives wrongly or fail to consider them, we can be challenged in the courts by judicial review.” This is true but it is not a practical route for redress for the average individual IFA or member of the public to take.

If an IFA was found to have backdated a fact-find, terms of business, attitude to risk analysis, affordability analysis or suitability letter, the FSA would, quite rightly and properly, throw the book at that IFA. I wonder, short of the above mentioned prohibitively expensive judicial review, who is there to throw the book at the FSA? I note that a complaint has been sent to Complaints Commissioner Sir Anthony Holland and I await the result with interest.

I well remember when I made a formal complaint against the FSA that initially they did not uphold my complaint. It was only after repeated, progressively simpler but ever more long-winded explanations of my complaint that they finally upheld it.

How many times and how seriously must the FSA fail in their statutory duties before someone relieves them of those duties and gives them to an organisation that can achieve them?

Lastly, I note that the IFA Defence Union has started action against the Financial Ombudsman Service for breach of human rights law. Thankfully, I have never had cause to experience having to deal with the FOS but I have long felt and indeed said that the current situation cannot be fair and wish the IFADU every success.

People of integrity expect to be believed and, when they are not, they let time prove them right. I urge all IFAs who value their profession to visit and contribute generously.

James Brooke, Anand Associates, London NW1


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