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Tony Byrne: Jobs for the boys (and girls)


I was appalled to find out recently that the FOS plans to increase its staff levels by 1,000 new employees. This follows an increase of 800 employees in the previous financial year. This is primarily because of the PPI misselling scandal.

The FOS’s chief executive Natalie Ceeney was recently quoted as saying that the case fee would have to rise from £550 to £2,000 if its adjudicators were forced to gain financial qualifications.

In the meantime we have to keep increasing our qualifications whilst at the same time having to pay higher and higher regulatory fees to keep the gravy train running.  This at a time when the FCA is putting pressure on us to reduce our remuneration.

This year my firm has paid a five figure sum to the FCA and the FOS, 80 per cent of which went to the FOS to pay compensation to clients of other failed firms. In what other profession this could possibly happen?

I contend there was no widespread PPI misselling. The FSA dreamt up another misselling scandal in order to justify its existence. The regulator continues to conspires with its buddies at the FSCS and the FOS to continually think of what “scandal” to expose next so that they can continue to build their empires. The latest issue is packaged bank accounts which the poor unsuspecting public have been missold because they didn’t all need the benefits offered on these bank accounts.

Forgive me for being so naive but I have been offered all of these products in the past be they PPI, packaged bank accounts, endowments, pension transfers, you name it.

Have I been tempted to buy them? Not if I consider them to be poor value for money or not suitable for my needs.

I have acted like a mature adult and made my own decisions and taken personal responsibility for the consequences. It is called caveat emptor. Unfortunately, caveat emptor does not apply in financial services but does apply in most other walks of life.

People buy all types of products and services which do not represent good value for money or are not suitable for them but the businesses that sell them survive with impunity.

Take warranties for example. Just how many people buy useless warranties on all sorts of electrical equipment? Will there be a monster unaccountable regulator created with a half billion pounds a year budget to set up an enquiry and then retrospectively force these businesses to write to their customers and offer compensation for misselling? Of course not. 

Unfortunately the effect of all of these so called misselling scandals is that the public’s confidence in financial advice diminishes every time making them less likely to seek professional advice.

That is why I believe the regulators have got it all wrong. Instead of promoting scandals they should be promoting professional advice and emphasising all the good we do. Regulation simply isn’t working.

Tony Byrne is financial planning director at Wealth And Tax Management


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Christ, MM must be desperate to get us BTL commenters back. No widespread PPI misselling? Absolute rubbish. Flat-earthery, in fact. PPI was tacked onto loans without telling the holders, application forms were forged to make it look like the marks had agreed to it when they hadn’t, it was sold to self-employed people for whom it was technically impossible to claim. Even my own sister had one of these things on her credit card. (She was 23, no dependants, and had never owned a financial product other than her current account.)

    Caveat emptor is not a licence to commit fraud. There is no comparison with extended warranties. Occasionally stuff does break down between the expiration of the statutory warranty and the extended warranty – just not that often. They’re not useless, just incredibly overpriced. There is no history of Argos and co faking customers’ signatures or refusing to meet genuine claims. If they did there would be a major scandal which would result in a large-scale redress scheme being set up.

    There may be an argument that the FOS is feather-bedding, but it came completely unstuck at that point.

  2. This type of selfish ranting is one of the reasons FS has such a bad name. Customers should be at the forefront of our businesses, not stitched up and left out to dry by firms they place trust in. Tony, not everyone is as financially capable as you and you should not assume they are.

  3. Good grief Tony, are you feeling better now?

  4. I see what Tony is getting at, but I also tend to agree with Sascha and Matthew.
    The banks have been and still are a really venal bunch. The sooner they just stick to banking and quit trying to flog add-ons the better.
    The public are also not entirely as stupid as our regulators would believe and far too many are not as honest as they might be. In the blame and compensation culture we have engendered, many are too ready to hold out their hands for bounty to which they are not entirely entitled.
    Modern society seems to engender and promote stupidity. The more crass the better. Perhaps all this money collected in fines and penalties would be better used trying to properly educate the public. (Not by the likes of the fatuous Money Advice Service). But I still have the feeling that most of the public pay dumb because it pays them to do so.
    Oh and Tony – Extended warranties do on occasion work. They are expensive and not infrequently a scam. You may recall that Dixons did indeed have to compensate for flogging these without due care.

  5. From what I’ve heard and read, the banks certainly did mis-sell PPI for many years, typically to people whose circumstances were such that they’d never have been eligible to make a claim or as a thinly disguised condition of the loan or with the cost as a single premium added to their loan (without the borrower/s realising just how much it was). Many people appear to have been barely aware that they’d been sold the product at all. All these things strongly suggest that the product was unsuitable and/or inappropriately sold

    Almost as scandalous, however, is that the FSA allowed such practices to go on for so many years without attempting to do anything about it. So the banks were lulled into thinking that the issue just wasn’t on the FSA’s radar (turning the industry upside down and inside out with endless embellishments to its RDR seems to have been a much higher priority) and that it never would be. So they just carried on regardless. And, until relatively recently, the FSA just allowed them to.

    The fact is, though, that the current scandal is as much a result of regulatory negligence as that of those who actually did the mis-selling on such an epidemic scale. But do we ever read or hear of the FSA admitting this? Of course not. We never do. So it’s another massive clean-up exercise at vast expense (to other parties, of course) and another massive blow to the reputation of the FS industry. Isn’t protecting and enhancing that supposed to be one of the FSA’s primary mission objectives?

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