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Maggie Thatcher: The PM who created IFAs

iain-anderson.

The first General Election I really remember was 1979 – watching John Craven’s Newsround break off to Downing St as Maggie entered No10.

The first national party conference I attended was Brighton 1984, when Maggie and her Cabinet survived the IRA Bomb and the miners strike raged around us.

As I studied economics in the late 80s at St Andrews, home of the new Adam Smith-ers, the Big Bang started to transform the City and with it  the UK’s fortunes.

For my generation and countless others my life has been shaped by Maggie and her premiership.

And the fortunes of financial services – for good and bad – were unleashed by that term of office.

Britain’s longest serving 20th century Prime Minister embarked on a personal savings revolution and council house sales were just the start.

To come were personal pensions; the expansion and globalisation of ‘The City’; privatisation and the emergence of the ‘Sid’ culture: individuals who directly owned shares for the first time.

For readers of Money Marketing – her premiership created the ‘IFA’ itself.

Were all those changes good?

I believe her direction of travel was right. Of course some reforms were not, or turned out to have unintended consequences.The personal pensions ‘scandal’ led to an ebbing away of confidence in retail savings.

Many would say an artificial ‘wall’ between IFA and tied advice did not reflect the realities of the market or of consumer understanding.

An unbridled focus on home ownership created the conditions for a lending and credit bubble, the effects of which we now live with.

As a Scot who supported her, I was never in the majority. But it would be wrong to say she unleashed the devolution or independence debate, it was there for all to see in the 1970s.

While the sense of ‘north’ vs ‘south’ deepened under her Premiership it was always there in any case and remains so after two decades.

Without Maggie the financial sector would not have reformed on its own.

Share ownership would have remained the privelege of the few. Homeownership would only have remained an unobtainable dream.

The financial adviser – in all its forms – would not have been the same.

Maggie’s legacy will always be controversial but her big political idea, personal responsibility, did much to fire up finance.

She will always be Maggie to me and Thatcher to others – but she changed our world.

There are few politicians of whom we can say that.

Iain Anderson is director of Cicero Group

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Comments

There are 12 comments at the moment, we would love to hear your opinion too.

  1. Most importantly from Iain’s perspective, it was Maggie who abolished the hyphen tax.

  2. AND NOW her successors are intent on destroying the IFA sector.

    Anyone think there isn’t an agenda at the regulator to get rid of the pesky IFAs, best option, price them out of the system by hiking fees up each year 4 times the inflation

  3. Ironic really that home ownership is once again an unobtainable dream given the short termism of RTB lack of sustainable housing policy to go forwards.

  4. “unintended consequences”

    I’ll say. Like 30% of ex council house stock being owned by private landlords.

    SERPS Rebates to encourage ‘Opt Out’s’ and then of course the miss-selling scandal as a result.

    And, because you’re a Scot: Shortly after Thatcher’s death, Scotland’s First Minister Alex Salmond argued that her policies had the “unintended effect” of making a devolved Scottish Parliament appear “absolutely essential”. He said: “I think the social policy dimension, almost a denial of society, was the thing that gave the opposition to her policies the most pointed nature in Scotland. The economic policies were disagreed with, but the social policies were antipathetic to the Scottish character, hence the degree and level of opposition that she provoked. Hence the unintended consequence that I think a lot of people in Scotland, looking at the poll tax, thought to themselves, well, the Scottish Parliament instead of just being a nice idea was something that was absolutely essential to prevent such a policy being imposed from on high again.

    I call her Thatcher.

  5. Who agrees with anybody on everything? A giant of the 20th Century has passed on. She stopped Britain being an international laughing stock; something to which recent governments have tried to return us.

    To merely restrict what she did for financial services is being a tad self-centred. I lived in the North during her term and I can assure you it wasn’t all coal miners and whippets. The North prospered under her just as well as the south although the inhabitants of Liverpool and the North East would have it otherwise, Leeds and Manchester prospered. No coincidence as these two centres retained the Victorian work ethic so lacking elsewhere.

    What she achieved with the unions was merely putting right what was suffered for almost a century. The only reason there was no industrial action in WW1 was the Defence of the Realm Act. In WW2 strikes were no stranger, nor at Suez. What started out as a social good became a social handicap – Maggie sorted it.

    Never was the tax trawl greater – and we didn’t have the stealth taxes or chicanery so prevalent in budgets today.

    In spite of the furore, if looked at logically (and Maggie was nothing if not logical) the Poll Tax was an excellent idea. The fault was that it was poorly packaged. It should (if anyone has the guts) be resurrected. Perhaps it should be called Individual Council Tax so that instead of hysteria we may get some rational appraisal of the concept.

    Her foreign policy gained us international respect. The Falklands was a minor incident compared to Iraq and Afghanistan. The main difference of course being that the Falklands were directly in British interest, whereas many couldn’t give a fig for Iraq and Afghanistan.
    The spare plinth in Trafalgar Square awaits. It should be a second column to rival Nelson’s.

  6. If Maggie decimated the unions for having a stranglehold on the country. What would she make of the FSA?

  7. If you think the regulator is out to destroy the IFA community then there is a way of turning the tables.

    I have a it asking the regulator over the last few months to enforce basic authorisation rules as under the Financial Services and Marketing Act 2000 it is meant to be illegal to give advice or promote products without holding authorisation.

    I recently reported lead generation site for promoting financial services and asking for personal details to be introduced to an IFA. This particular website didn’t have FCA authorisation so I reported it to the regulator only to be told that the company in question was exempt from FSMA2000. When I pointed out that this was not the case they referred me to an amendment of the legislation – Article 33 of The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001

    What staggered me was this part of the legislation is meant to give exemption only for a client to refer somebody to an IFA or a professional body to refer somebody to an IFA. It does not exempt a company from marketing regulations and there is a big difference between company making a referral to an IFA the natural course of its business like a solicitor or accountant and then a marketing firm who are basically collecting data to be passed on or sold on to IFA. What the actual regulator is giving a green light to is for any IFA to open up its own subsidiary and do practically anything it wants in marketing and the FCA will be powerless to act as the firm would be exempt under the above act. I suspect if an IFA practice try to do this they would soon find themselves in deep water.

    You may think I’m being a bit anal here but forcing the regulator to enforce authorisation rules under the FSMA 2000 will not only help the IFA community protect its trade it will also help defend the IFA community from claims management firms who often do not have FCA authorisation and cannot make personal recommendations to clients as Money Boomerang are about to do in their new TV advert.

    After all how can you tell a client that there have been miss advised if you’re not making a personal recommendation!

  8. @ Harry Katz

    Couldnt have put it better myself!

  9. I heard Neil Kinnock on TV last night, one of the few times I have agreed with him when he almost grudgingley accepted Mrs T and Arthur Scargill deserved one another. Without them fighting we would have been in a worse mess than we are now I think.

    Also saw Ken Livingstone interviewed and Boris Johnson and I think London deserves both of them too and they should be forced to job share! Shackled at the ankles and wrists so they have to wipe one another bottoms until they learn to co-operate and mplay nicely together.

  10. The Grey Defector 10th April 2013 at 8:40 am

    Whilst we eulogise over the ‘wonderful lady’ and her achievements let us also recall that she introduced the ‘me, me, me’ culture which expresses itself in so many sordid ways these days.

    Brave and focused yes.

    Also uncompassionate, self-centred and, like the regulator, deaf to reason.

  11. I have never agreed that throwing tens of thousands of pounds at council house tenants to encourage them to buy their homes was a good idea. As Dale Cox says it was very short term thinking. I don’t think Mrs Thatcher was an evil person but I do believe she was not a compassionate one and her overall legacy has been damaging and she only deserves praise for her work ethic, which I did admire.

    I had to laugh, yesterday, when I heard Lord Young even claim that the internet and broadband revolution would not have happened without Margaret Thatcher. Talk about wonky logic and stretching credibility.

  12. Council House sales weren’t the problem – the problem was not letting local authorities use the receipts to build new properties to replace those sold.

    I was a councillor in a (very) Tory borough in the late 80’s – trying to solve the housing crisis then with a series of petty measures such as ‘self build’ and even using mobile homes, was like trying to solve cholera with a sticking plaster.

    Receipts were ring fenced to keep the rates down – the homeless were ‘people you stepped over on your way to the opera’ according to one Tory Minister.

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