As I was putting the finishing touches to my latest five-page letter of
recommendation for a regular-savings Isa, I reflected on a programme on
Radio a few weeks ago.
A couple of learned industry professionals were in the studio to answer
questions about Isas from members of the public.
Most of the questions were unremarkable, typically from people who had put
some money into an Isa but didn't have a clue what they were doing or why.
Multiple Isas with banks and building societies were a common theme.
How can so many people have been advised to roll over funds into a cash
mini Isa with nothing whatsoever in the way of a fact-find having been
carried out? This would, of course, have identified that they already had a
cash mini Isa.
Peach question of the show, though, was from a woman in the West Midlands
who, with no experience or knowledge of investments, had been persuaded to
hand over £7,000 to a well-known and apparently respected stockbroking firm
for investment in a self-select stocks and shares Isa. Could the panel help
her choose some stocks? I suggest such cases are far from rare.
This raises a few questions. First, are stockbrokers subject to an
entirely different and evidently vastly less stringent regulatory regime
than IFAs? Or doesn't the Securities and Futures Association bother itself
with tedious chores such as compliance visits?
If stockbrokers are supposed to be subject to the same – or at least a
similar – set of rules as the rest of us, then how can such brazen
disregard for all the protocols that IFAs are required to observe be
allowed to go unchecked?
Is the regulator aware of such (mal)practices and, more to the point, is
it making any effort to do anything about them?
When the FSA assumes responsibility for what are presently the duties of
the SFA, will it address these issues? Or will it instead be too
preoccupied with devising the next cat-of-nine-tails with which to lash the
For what are we being charged our annual levies by the regulator when, as
IFAs, we are being hounded almost out of existence while banks, building
societies and stockbrokers seem able to carry on as if this was 1980 as
opposed to 2000? I despair.