August is a strange month. It is when everybody seems to disappear off on holiday, we get that feeling of relaxation and sport seems to fill our minds.
But just as we are relaxing, we generally get wind of which Financial Services Compensation Scheme bills and suchlike the regulators are seeking to throw at us.
The more I see regulation evolve, the more I realise we are further away from its original objectives.
The FCA’s key objective is consumer protection. But what we seem to have now is an ever-growing bureaucracy with commensurate higher expenses and – given the number of times the various regulatory agencies bring in external help – a dearth of internal expertise. I am sure the legal bills for some of these bodies would shake us rigid.
I have always felt the wrong people end up paying for misdemeanour in this industry, either by proxy, through damage to our general reputation or by actually having to fork out as part of the FSCS scheme.
It seems ridiculous that what we have at present is a situation where the scheme fails to go after the people really causing the problems.
The due diligence work the FCA is carrying out with providers should go some way to solving this problem, certainly with those issuing regulated products. But it still leaves those issuing unregulated products getting away with rather a lot.
The FCA should not be allowed to make this distinction. Any product involving money should effectively be regulated. Full stop.
The idea that some escape is just not acceptable, unless of course they are restricted to what I call the unprotected investors.
But where we find these products being sold, they are often proffered on some kind of ego trip by the advisers concerned: the ability to produce something the client would not find elsewhere. But they probably should not be searching there in the first place.
We see all of this cost against the backdrop of FCA chief executive Martin Wheatley and his team telling us they are not minded to provide any form of regulatory dividend.
But the problem with that is when the FSA put forward the RDR it said, on more than one occasion, for those well-educated and well-behaved IFAs, a regulatory dividend would find its way through. Now Wheatley tells us it might never arrive.
That is a case of making a promise and then not delivering. If we did that on an investment product we would find ourselves in trouble. I do not see why Wheatley should be exempt from the basic rules.
The important thing is the regulator accepts we deserve the same treatment as our clients expect of us.
We are effectively your clients, Mr Regulator and if we could get the relationship between us and the FCA on a client/consumer basis then we would be in a far better place to move forward.
I realise the FCA has more than one constituency of client but it would help if it woke up to the fact that the people generating the work that created the jobs keeping them employed are suffering – and something needs to be done about it.
Robert Reid is managing director at Syndaxi Financial Planning