View more on these topics

Tom Baigrie: Spare the good advisers and hit the crooks

Tom-Baigrie-MM-Peach-700x450.jpg

I had hoped that the FCA would change the regulatory focus to one of weeding out the crooks that still populate the fringes of financial services, rather than continuing the FSA’s mission to ensure that only advisory perfection, or rather their very limited version of it, survives the RDR cleansing.

But recent comments about the way adviser charging is described indicate that Martin Wheatley’s team could be making the classic policing mistake of forever nicking the law abiding whose mistakes are easily spotted while under-resourcing the much harder job of catching the genuinely evil.

To hear the former England football team manager Sven-Goran Eriksson’s tale of woe at the hands of  the sort of financial advisers to realise that it’s not just the poor that are sometimes naive. The rich and skilled can be equally gullible outside their area of expertise and inside ours. The commentary following that bit of news had regulators explaining how hard it was to police offshore financial advisers, which in the 21st century is a cop-out that a Hong Kong-trained regulator should be embarrassed about. 

What regulation has undoubtedly achieved is the severe pruning of the advisory community, with those left having proved themselves masters of change management and reformation, whether made just in time or many years ago.

What is left is a consolidated and still rapidly consolidating group of decently run businesses. It is time to leave them to get on with sharing their new market and extending its reach so that more Britons start to plan properly again for retirement, old age, death and disability. For it is no coincidence that the apotheosis of regulation has coincided with the almost complete death of savings and investment among those hard-working families the Government so badly wants now to help.

So instead of focusing on the technical failings of those decently run businesses, the FCA should concentrate its vast resources on hard policing as well as a far greater emphasis on financial education.

On the policing side, the answer is to run out of town the crooks who do not engage with the FCA at all.

Dodgy dealers are much harder to bring to justice than a good IFA struggling to cope with the new world but he is not the one doing genuine harm.

Wheatley could take a leaf out of Boris Johnson’s book. Since the Met has de-prioritised catching those who speed on motorways because they are Britain’s safest roads and refocused resources on the tougher squads that catch and deter the much smaller and harder-to-find tribe of career criminals, crime rates have plunged. It is time for the FCA to do its version of the same.

And because the best way to cut fraud is not to regulate but to educate, the Money Advice Service needs to up its game.

I was on the MAS site recently looking at its protection pages and for the first time I thought they were accurate and clear and useful. So let me be perhaps the first of the Money Marketing commentariat to suggest that MAS is getting its act together under its new leadership team.

It is not just good content that is needed, though, it is a much clearer focus in its advertising on how people can avoid serious financial mistakes and on how to act on the knowledge gleaned from the site.

Education 21st century style combined with hard policing would be a great FCA combination in 2013 and beyond.

Tom Baigrie is chief executive of Lifesearch

Recommended

Mark Carney

Carney calls for public debate on LTV caps

Bank of England governor Mark Carney says there needs to be an open debate about introducing loan-to-value caps to curb risky mortgage lending.  Speaking at a Treasury select committee hearing on the Bank’s inflation report today, Carney rejected suggestions the housing market was booming by pointing out it was performing very differently across the country. […]

Europe-Flags-Falling-EU-Dominos-Crisis-Recession-700x450.jpg

Europe has turned a corner but what will the German elections bring

The recovery has begun. After six consecutive quarters of declining output the eurozone economy finally emerged from recession in the second quarter of this year. The monetary union, in aggregate, grew by 0.3 per cent compared with the first quarter, although the annual comparison remains negative at minus 0.7 per cent. Encouragingly, the improvement in […]

1

‘Britain is turning a corner’: Osborne says Plan A is winning

Chancellor George Osborne has argued the UK economy “is turning a corner” thanks to the Government’s commitment to austerity. Speaking before academics, think tanks and businesses in London today, Osborne highlighted the improvement in economic data over recent months and claimed this has “decisively ended” questions over his austerity-based economic policy. Osborne said: “The economic […]

Value for money in DC pensions

The Pension Policy Institute (PPI)’s recent report “Value for money in DC pensions” tries to identify factors by which people can assess whether their pension offers fair value for money (VFM). Fiona Tait provides an overview of the findings. Positive Outcomes It is extremely hard to assess VFM in a pension. Press activity naturally focuses […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment