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Scott Gallacher: Advisers can turn the tide of bad press

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Yet again our latest regulatory invoice is significantly higher than the last. It is tempting to complain loudly but, as a financial adviser, I have learned our public image is still less than ideal and complaining about regulation is unlikely to elicit much sympathy.

Of course, our own clients regard us highly but the public generally is less trusting. The poor image is a result of genuine issues, such as the many misselling scandals, but also a continued and often-unfair bad press.

To take the misselling part first: there is no getting round the fact the scandals were, well, scandalous. Many were victims. However, rather than these being a failure of regulation, I prefer to see them as evidence of the success of the regulation we have. Think for a minute about what has happened.

Some advisers caught up in the scandals were unskilful; some lacked judgement. Even worse were those who deliberately took advantage. However, due to regulation, the bad advice was eventually identified, losses quantified, clients compensated and lessons generally learned.

Overall, regulation is doing its job, especially with the introduction of the RDR. Of course, in an ideal world there would be more identifying of problems before they arise but in the real world, dealing with complex financial matters, this is not always possible.

Onto the second point, then: is the continued bad press justified? It is a sad fact bad news sells (so much so that a fellow media-friendly IFA recently told me a genuine good news protection policy story of his had been declined by several papers precisely because it painted financial services in a good light).

This continued bad press – bias, even – coupled with an almost non-existent financial advisers’ lobby and weak governance, can only result in ever-greater regulation. The kind of regulation that might extend far beyond what is needed for the protection of clients and deep into the “business prevention” territory of overzealous compliance.

And as we know, the cost of this would not just come out of fat cat profits: ever-increasing costs could drive good advisers out of business, put others off becoming one of us and ultimately increase costs to clients by way of higher advice fees.

So what can be done? I would like to take this opportunity to appeal to my peers to join me and other media-friendly advisers in really making an effort to engage with the media (trade, local and national) to help turn the tide of bad news stories.

We all have genuine good news stories to tell and it really is not difficult to do. I discovered some years ago press releases are not just the preserve of large, well-connected companies with press offices: anyone can email the media outlets with their stories. Most journalists are only too pleased to receive copy, so do not be shy.

Let’s all make an effort, where we can, to help turn the tide of perceptions. Otherwise, should we really complain when the ever-increasing regulation bills hit our desks?

Scott Gallacher is director of Rowley Turton

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. The public’s view of the industry would probably be considerably improved were the FCA to act swiftly and decisively on information received BEFORE various misdeeds, malpractices and mis-selling trends blow up into major motorway pile-ups ~ what Lesley Titcomb gaily describes as being “a front-foot regulator” instead of one that seems to be forever coming a cropper on every other banana skin that it’s either failed or chosen not to see.

    Were it to do so, wrongdoings could be if not nipped in the bud, then certainly stamped on before becoming a major scandal ~ and aren’t there forever so many of those? As a result, tales of industry misdeeds would be considerably less in both frequency and scale, thereby enhancing public confidence in both the industry and its regulator. Isn’t enhancing and maintaining public confidence in the industry one of the FCA’s primary statutory objectives? Of course it is. The trouble is that the FCA seems still to have little if any regard for its statutory obligations and no body exists to hold it meaningfully to account for its never ending litany of failures. Should the TSC finally manage to secure the powers it’s now seeking, that may well change, but we’re still some way off.

  2. The notion that regulation has been successful is novel.

    If success is assessed as chasing thieves from your whelk stall whilst pirates maraud the shoreline then so be it.

    My own view is that the ‘successes’ have proved enormously costly and had we a decent product levy then the FCA/FSA/FOS would all be of a smaller and less conspicuous size and nature to the current reptiles.

  3. Whilst there have been changes brought about by regulation that are of a positive nature, I agree with the tenet of Julian and Peter’s comments – FCA has tended to take action AFTER the event because it was asleep at the wheel at the time things went wrong. We already have the scenario that Scott suggests in the following paragraph “This continued bad press(….), can only result in ever-greater regulation. The kind of regulation that might extend far beyond what is needed for the protection of clients and deep into the “business prevention” territory of overzealous compliance” ……and we already have regulation which drives good advisers out of business and puts people off from a career in financial advice. And clients are already paying higher fees because of the cost of complying with regulation. The FCA makes its own rules up and forces us to follow them, and the TSC has no teeth at present to rein them in.

  4. The TSC is reportedly seeking powers that will give it the authority it currently desperately and often humiliatingly lacks to hold the regulator properly to account. Whether or not these powers are granted remains to be seen though, in light of the events that have led to Wheatley’s pending departure and replacement, we can but hope the portents for this finally to happen are better than they’ve ever been.

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