In response to Loretta Minghella’s letter about the Financial Services Compensation Scheme, headlined, Inaccuracies over FSCS powers, it seems to me that one of the biggest problems for the industry is the “rules” by which organisations such as this operate.
For example, Minghella denies that the FSCS hounds retired IFAs over old business based on hindsight reviews, yet the pages of Money Marketing and those of countless other publications are positively littered with accounts of exactly such campaigns of persecution.
No comment is offered, for example, on how the FSCS has determined the liabilities about which it has been writing to the former principal of the firm that was the subject of my original letter and to his former non-equity partners, most of whom left him and his business well over a decade ago.
How can the retrospective application of standards not defined at the time that the advice was given be deemed to be anything other than a hindsight review? I am sure that the industry at large would be keenly interested to know by what reasoning Minghella deems such reviews to be on any basis other than by hindsight.
Who initiates these reviews of a firm’s past business? Who undertakes them? By what methodology? In what way is the advice given deemed all these years later to have been deficient? None of this information has been supplied and no opportunity has been offered to any of the FSCS’s targets to raise any challenge on any of these points.
Right from the word go, the FSCS holds all the cards, shows them to nobody and has been writing threatening and possibly, by any standards of proper justice, quite unfounded letters to people who had no stake in the business, no (meaningful) say in how it was run, never received a penny of its profits while they worked there and, least of all, received any of the proceeds from its eventual sale several years after they had left.
In the world of regulated financial services, justice is a concept decidedly different from that which applies in the outside world. But, hey, the FSCS has its rulebook and if the rulebook
says what it does and how it does it are okay, then for people like Minghella, that is all that matters and what anyone else may think clearly does not.
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