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Independent view – Tony Byrne

“…As judge and jury, I find you, IFA, guilty until proven

innocent…” This could easily be the summing up of a PIA ombudsman in a

complaint against an IFA these days.

Newspaper comment might go something like this: “The commission-hungry

salesman took advantage of the hapless misselling victim” and so on.

How tired are you hardworking, decent, honest IFAs of reading this

codswallop in the national press?

I was prompted to write something about the PIA when I received our ICS

levy statement from the regulator recently. This followed fast on the heels

of the PIA&#39s totally inept regulation of Independent Insurance and

Equitable Life. Shouldn&#39t the PIA now be subject to a compensation claim

from the victims of the regulator&#39s fee-hungry bureaucracy?

Don&#39t be silly, you cannot claim compensation from the judge and jury. In

a recent PIA statement, I read that it has considered the subject of

compensation payments as a result of its own negligence and decided that,

due to the cost and the fact it is effectively a public body, this could

not be justified and it will only pay compensation at its discretion.

Now try telling the poor IFA who has been put out of business by the

regulators and even bankrupted in the most unfortunate of cases that this

is justice. Surely, the PIA can put an ICS-type levy on the Government to

bail itself out in cases of apparent negligence and rescue the victims,

namely, policyholders, staff and shareholders? Can&#39t it?

The regulatory regime is so discredited that it is surely time to review

and restructure its set up? The Financial Services Act has been written in

such a way as to make the IFA guilty until proven innocent and the only way

of proving innocence is in documentary form. That means murderers get more

justice than us.

To start with, murderers receive a fair trial with an independent judge

and jury and representation by a barrister. All forms of evidence are

admissible including oral evidence and the evidence of witnesses. The

verdict is only reached once the jury is convinced beyond reasonable doubt,

with an overwhelming majority of votes, that the murder was committed by

the accused.

What is the IFA&#39s position? As soon as a complaint reaches the PIA, the

IFA is “fined” £500 for the PIA to investigate the complaint. The fee

is non-refundable whether or not the IFA is found liable. Next, the PIA

will study the files and correspondence between the complainant and the

IFA. Especially if there is insufficient documentary evidence on file, it

will often find in favour of the complainant because the IFA cannot prove

his innocence. Appeals are considered by the PIA itself. What kind of

regulatory regime is that?

Like most IFAs, we have had to conduct a pension review. In cases where

clients have had windfalls, these have not been taken into account in

assessing their cases. The worst example was a £57,000 windfall

payment to a client who also received compensation. Surely, any windfall is

as a result of the IFA&#39s advice and should be taken into account?

The pension review has cost many IFAs a substantial sum of money and it is

clear there have been a number of misregulated victims (IFAs) who have

suffered from power-hungry regulators (PIA), as well as compensation-hungry

consumers. Let us not read any more about commission-hungry salesmen and

misselling victims.

Tony Byrne is business development director at Byrne Williams

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