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Alan Lakey: The cosy ex-regulators club

Alan Lakey MM blog

The recent announcement that ex-FSA managing director Jon Pain would be joining RBS confirmed the general view that a CV parading the regulator’s name is a gateway to financial success, as Sir Hector will attest. 

It affirms the opinion of former chief ombudsman Walter Merricks, who confided people often joined the FOS to add that name to their CV. The list of ex-regulators who later tip up at a major financial institution is long and sorry. 

Many join large accountancy practices, for instance David Kenmir, who left the FSA in March 2009 and is now a partner at PWC. PWC is a watering hole for other regulatory alumni such as ex-FSA managing director Margaret Cole, who took up the senior legal adviser’s role last year on a reputed £680k.

KPMG also willingly accepts regulatory ship jumpers. Fiona Fry started as head of RDR and latterly as head of regulatory risk, and she was joined by ex-FSA project panager David Dickinson. Jon Pain emerged at KPMG immediately after exiting the FSA and Clive Briault, who left the FSA with a substantial payoff, took a part-time senior advisory role in August 2010.

Thomas Huertas, former head of the FSA’s International Affairs division, and famous for wanting closer links with the banks, became a partner with Ernst & Young in September 2011. Similarly, Amanda Bowe found the RDR fiasco useful in gaining the position of UK group compliance director at Aegon.

Post-regulatory success comes no higher than for Collette Bowe. Her ignominious term as chief executive of the PIA acted as a springboard into the lucrative waters of corporate directorships.

As chair of Ofcom she received £180,000 in the 2011/12 year. Additionally, she has enjoyed tenures as executive chairman of Robert Fleming’s European asset management business and also chaired Ofcom’s consumer panel from 2003 to 2007.

Bowe also chairs Electra Private Equity and the Associated Board of the Royal Schools of Music, is a board member and chairman of Axa Investment Managers’ audit committee, a board member at Axa Deutschland GmBH as well as the UK Statistics Authority. Further, she is a governor of Bancrofts School, a trustee of the Tablet Trust and of the Nuffield Foundation, vice-president of the Royal Television Society and a visiting fellow at Nuffield College Oxford. She was also a previous board member at London and Continental Railways.

Dame Deirdre Hutton, like Sir Callum McCarthy, is a non-executive director of Castle Trust and also has held the following positions: vice chair of Royal Ahold, non-executive director of Thames Water and director of HM Treasury.

She also chaired the Civil Aviation Authority, the Advisory Board of the Rotterdam School of Management and the National Consumer Council, where she was replaced by Christine Farnish, herself former FSA consumer director who also chairs the Parenting and Family Institute and is a board member at both ABTA and the Aggregate Industries Board.

Carol Sergeant left the FSA in 2003 and has since been chief risk officer at Lloyds Banking Group, a director of Martin Currie and Secure Trust Bank and latterly chair of the Simple Products Steering Group.

Within the regulatory orbit, the role of individuals in collective failure is never recognised and knighthoods and OBEs seem to flow freely. “Collective responsibility” for failure, as Briault famously termed it, places a gloss on individual inadequacies and provides a cast iron alibi when regulatory ineptitude is made public.

Alan Lakey is partner at Highclere Financial Servic


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There are 19 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 5th July 2013 at 9:56 am

    And, to cap it all, Tracey McDermott was recently quoted expressing frustration at the difficulties the FCA seems to encounter when trying to identify and hold to account senior bank exec’s for their roles in and responsibilities for various failures and reckless practices that have led to the calamities experienced by a number of major banking institutions.

    One cannot help but think that before sounding off about the frustrations of trying to hold senior bankers to account, the FCA would do well to set its own house in order. Opennness, transparency, accountability and all that ~ aren’t those reasonable things for us to expect from our regulator, whose very existence we’re forced to fund?

    Doesn’t the very absence of those things confirm the need for an Independent Regulatory Oversight Committee with, amongst much else, the unassailable authority to identify and hold to account failed regulators in the same way as those very regulators themselves seek to hold others to account? Wouldn’t it be nice if such a Committee were not only to exist but to have also powers of disciplinary and financial sanction over regulators whom it deems to be failing to deal with it “in an open and cooperative manner”? The TSC has the power to ask questions, yes, but it has no power to do anything except huff and puff a bit when it considers the answers it receives to be unsatisfactory, incomplete or misleading. Clearly, a stronger and more powerful body of enquiry is required.

  2. Derek Bradley ceo Panacea Adviser 5th July 2013 at 9:58 am

    Could not have put it better myself.

  3. Quis custodiet ipsos custodes…

  4. Every edict, rule, policy and project should be accompanied by the names of ALL the regulatory individuals who sat in committees, meetings and mgmt teams and who eventually decided to do it and that and that it was a good thing. Why should they be able to hide – they are paid a fortune, have no genuine accountability to anyone as far as I can see and spend most of their time emitting vacuous guff (written as though they think they have to make it as incomprehensible as possible to seem important) that usually fails every test in terms of meeting any worthwhile objective. If they were a real world organisation, they would have gone belly up years ago, and rightly so. Failure should be recognised as much as success and maybe the transparency would focus minds a little better?

  5. IFA liable throughout their lifetime the same practice should apply to regulators. Well said Julian and Alan for views and information

  6. Dick Sprinkler 5th July 2013 at 10:35 am

    We are way beyond what is right/fair or even reasonable now – the regulation ‘industry’ is a self fulfilling monster which knows no bounds and more importantly suits government extraordinarily well.

    As has been said many times before there is a certain ‘type’ of person that inhabits regulation world and indeed politics and it certainly has got nothing to do with ability the fact that they move to ‘industry’ as Alan has explained so eloquently also has little to do with ability either but perhaps an inside handle into the regulator is worth a little more ?

    If regulation world burnt down tomorrow – they’d be dropped quicker than you could say knife !

    never mind the quality feel the width !

  7. Could not agree more with all of the above.
    Its time everbody was held to account not just certain parts of the industry.

  8. Financial regulators suffer from the same disease as Politicians and senior civil servants. They look at the role as a pathway to improve themselves, their earnings and reputation. The job, purportedly to enhance financial reputation and provide consumer protections, has little bearing on their actions as the bigger picture is seldom noticed, and their own ‘actions’ look good on a CV.
    The desire to do something is overwhelming, even if it wrecks the overall direction the industry is taking, but you do not want to create a poor reputation with the big salary future employers. Why did no-one do anything about the reckless actions of the big banks? Because they are future employers who pay well! The big Accountancy practices? Why not commission big, profitable, inconsequential reports for them to do, and don’t be too picky about certain tax advice. Fund managers, Life and Pension insurers? Not likely to provide a huge job, so fair game. IFAs? Good target as the ambitious are seen to increase regulation without harming future job prospects and advisers are all in love and paid too much in commissions anyway. Jealousy?
    So the regulator has certain employees who don’t care how many compliant, honest and client focused people they hurt, in order to enhance their career. Just like the Bankers they are trying to gaol, the insider traders, the Pension Liberators and the UCIS floggers, they have lost their moral and ethical compass. To make matters worse, most of their past jobs were in Accounting, Consulting and The Law, all of which treats the written rules as a challenge to overcome rather than the rules responsible citizens should lead their life by.
    Yes, there are loads of those in our industry who have a similar moral attitude to these regulatory employees, the difference is the FCA is now attempting to prosecute those in our industry whilst the careerists go on to lusher pastures unchecked.

  9. The Golden Circle!

  10. Are you describing a third world banana republic dictatorship Alan?

  11. So what? I’m sure the people that have left Goldman Sachs, Barclays, Deutsche bank, Morgan Stanley et al, have also gone on to better jobs… it’s what people do…progress.

    This just appears to be jealous ranting…

  12. This sounds like a very well researched article for which the author deserves considerable credit.

    People who have no responsibility for the failure or poor performance of the organisation they represented do indeed go on to comparable or better jobs. The point being made is that the individuals who were actually responsible for the many failings of the FSA and its predecessors are being rewarded by, in many instances, the very organisations they were supposed to be watching. However you divide it up or rationalise it, it is a deeply unsatisfactory procedure to put it mildly.

  13. Way to cosy for my liking, but then again its their rules and their game and they can swop and change them to suit outcome that favours themselves best.

    Another thing that strikes me is ? do any of us see employment adverts some of these top jobs ? or are these positions just filled “in house” or via a nice cosy little drink and handshake ?

    Bit like Hectors knighthood.

    Out of interest anyone know of any IFA’s that have joined ? I know of a few who have enquired but never even got an interview ?

  14. headbelowthe parapet 5th July 2013 at 3:09 pm

    Interesting stuff Alan.
    Yet more examples of the gamekeepers keeping an eye on the wrong type of game, but playing that game to their full advantage – they know that they will be offered lucrative compensation when they too become poachers; and because they’ve heard the siren’s call and been captured by the allure of riches they’ll ensure that they overregulate with bad regulation which is fragile yet complex, but which can be circumnavigated by those who penned it.
    Depressing, but I suppose this is our nature as humans – no doubt our masters at the FCA could use behavioural economics to justify this type of behaviour!

  15. James Hurdman 5th July 2013 at 4:37 pm

    I’m not sure how listing where ex-regulators now earn a living constitutes evidence of “cosy” relationships.

    The fact is that experience is gained if you work for a regulator, and that experience then has value to large private organisations. Those private organisations can pay higher salaries than the regulator, so guess what, they move on.

  16. @ James Hurdman
    Don’t you think it strange thet the very organisations the FSA were supposedly regulating during the “crash” are now offering them positions with large salaries?
    “Do not frighten the horses” must have been taken very seriously.
    Still, I suppose that left enough room to kick the ponies where it hurt.

  17. Nick Sehrkutty 5th July 2013 at 5:22 pm

    Great article as always Alan x

  18. Philip Spierling 6th July 2013 at 11:40 am

    You have as always scored a bullseye with this article.

    It makes you want to weep

  19. We regulators need to treble our income after a stint at Canary Towers.

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