Having read Nic Cicutti’s recent article, it appears that I have touched a raw nerve when I suggested that journalists should be subject to a monitoring authority in the same way as IFAs.
Let me say immediately that it was not a serious suggestion. I was trying to paint a picture of how Nic might feel if he was regulated in the same way as IFAs currently find themselves. It was originally borne out by his lack of empathy when the FOS took part in a complaints’ day, whereby the person making the best complaint was awarded an iPad and Nic could not understand why some IFAs were upset by this and suggested we needed to get out more often.
I have no problem with being regulated as long as it is fair regulation. As one writer stated, IFAs have fewer rights than terrorists, the FSA acts as judge and jury, there is no legal means of appeal and even an approach to the European Court of Human Rights has been denied.
urthermore, the liability is for life and not restricted to a given number of years. Where an IFA has clearly misled a client, then nobody would seek to defend the position but in the real world there are often areas of grey where currently the IFA has no true form of defence and is entirely at the mercy of the regulator, who will invar-iably fall over backwards to placate the client. The public are aware of this and it is surprising what phenomenal memories they have when there are facts they feel may assist them and how quickly the memory fades when they consider details that might not help their cause.
Unfortunately, with this unfettered freedom, the FSA has sought to extend the boundaries to what in many cases is tantamount to providing financial guarantees and often places the burden on IFAs rather than product providers. To take one recent example of Lehman Brothers and structured products, with the benefit of hindsight which we would all like to have, of course, clients should have been warned of the counterparty risks.
Details contained in key features documents in these situations seem to be conveniently overlooked. I cannot remember this being an issue with the regulator before the event or did it realise that Lehman Brothers was going bust and forgot to tell us?
I think in the current climate IFAs are realistic enough to know that they will never get a level playing field but would settle for one with an uphill gradient rather than the precipice they have to face at present. Hopefully, Nic, you will appreciate why IFAs are sensitive about the FOS trying to encourage even more complaints at a time when professional indem-nity premiums are going through the roof.
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