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Robert Reid: Time for journalists to be regulated?

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Some years ago I used to take part in a live television phone in where we had to provide advice to viewers.

The downside was that we had no notice of the question but the upside is that no one could edit it to suit their own particular purpose.

The last bit is why I would never do any TV that is not live, recording allows for editing and that’s not a part of the process that we can ever control.

Recently Channel 4 broadcast an episode of Dispatches on the topic of alleged annuity misselling or more correctly annuity misbuying. It demonstrated that the default shape was often purchased when another format was more suitable. The missing feature was a spouses pension but then if the standard pack offers three or four options and none of them have a joint annuity is that any surprise? The excuse that the key features or the brochures carry the necessary detail holds no water.

I had a client some years ago who told me his wife had enough income and wanted to set up a single life annuity. I refused to action his request and sent him away to reconsider. He capitulated and we set it up quarterly in arrears to mitigate the rate reduction for the spouse’s pension. He died after one month and his family were shocked that he had made the provision but more to the point I had protected my firm against the inevitable claim.

Nowadays we use medical professionals for the completion of health details again to close the door against potential claimants. If the providers end up having to compensate for sticking to the wrong default then that’s their choice.

The costs of changing the default to joint life would be relatively minor but even then the purchaser still starts from a position of weakness. Financial education is yet to capture the interest of the majority or more importantly the ones who need it most.

What bugged me about the programme was the suggestion that property and even classic cars were preferable to pensions. If the volatility of investments concerns the regulator then the idea of everyone collectively buying classic cars should fill them with dread.

We were then treated to the suggestion that this annuity problem would dwarf PPI, but no stats to support it. Far easier if the programme had just told the un-pensioned or under-pensioned not to bother as someone else will look after them.

It is so easy to be destructive in commentary. What we need is solutions that are affordable and easy to promote but crazy assertions have the opposite effect.

I have one more reflection on live television. Sitting on set for two hours requires well supported seating and following my suggestion they agreed to re do the seating with a high back to provide better support. On the next show we found the seats were in the correct proportion but upside down we had a very deep seat and a shallow back, I could just get my feet on the floor but a fellow IFA must have resembled a ventriloquist’s dummy due to his lack of height, as his feet not only did not touch the ground, they didn’t even make it off the seat.

In this business we all need our feet on the ground as we need to help educate the public and reduce our risk of doing business. What we could do without is careless talk.

It is about time the media exemption from regulation was re-examined – after all comment is fine but far too often these comments are taken as advice and that should not be exempt from the burden of regulation.

Robert Reid is managing director of Syndaxi Chartered Financial Planners

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Question: “Time for journalists to be regulated?”

    Answer: No

    Why: The press should remain free and not be regulated by politicians. The FCA Board selected by, and subject to removal by, HM Treasury. HM Treasury decided upon the scope of activities that should be regulated.

    The government claims the FSA/FCA is independent because they have an eye to preserving the myth of the “separation of powers”, a constitutional issue because if the government and executive are one and the same you risk dictatorships where the different powers of government are assumed by one body i.e. no separation of powers.

    You see the executive FSA/FCA is not supposed to make laws (the role of the legislature) or interpret them (the role of the judiciary). The role of the executive is to enforce the law as written by the legislature and for its actions to be adjudicated upon by the judicial system. We all know this is not the case in financial services. The FSA is therefore an abuse of power in a democratic system and as such a danger to us all.

  2. The interraction and engagement with and via the media definately needs a rethink. Not sure if qualifications are the answer

  3. Nonsense, Rob, but you know that fine well. People taking journalists comment as advice is no different from people assuming the service they get from unregulated or commission-only, I’m sorry, I mean execution-only merchants is advice.

    The trouble with some of these journalists is they are wannabe demagogues and some even use the word ‘advice’ when referring to their scribblings/utterances.

    And if journalists were regulated, it would happen without exams. And that would elevate them to a level in society they simply cannot justify nor deserve.

  4. As with PII which adjusts markets without rules being put in place, something similar with journalism would make sense. Were I MM or FTAdviser I would look to agreeing to ensure all articles and especially blog comments require the writer to abide by the CII &PFS ethics code.
    If proven incorrect, all articlesmshoukd have an equivalent length retraction published and the original article should have an addendum.

  5. But what is wrong? And what of fair comment? Nah, that just doesn’t work.

  6. @PSA Floyd – I certainly don’t want to see the press regulated by government, hence my suggestion that certain financial journals commit to the same code of ethics we do as as advisers so that anon postings have to conform or be removed. Adviser who are happy and able to use their real name would then in all likelihood focus on commenting on those journals committed to a code of ethics. MM is nearest to this for me as their moderation of comments is pretty good unlike some I WILL mention (Citywire) who seem to go out of their way to act as agent provocateurs of arguments with individuals and the regulator to increase readership and comment.

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