I recently received a letter from the FCA Practitioner Panel inviting me to take part in a 10 minute telephone survey to give my views on the FCA. It did make me wonder whether or not they have been reading my articles.
This prompted me to do some research into this organisation. I discovered that there are in fact three panels, the FCA Practitioner Panel, the FCA Smaller Business Practitioner Panel and the FCA Markets Practitioner Panel. Two of the three chairman are bankers whereas the other one is a risk management specialist.
So rather than having one bureaucratic organisation we’ve got three. And as usual bankers dominate.
I then decided to check the current membership of the FCA’s board of directors and surprise, surprise what did I find? There are 12 members of the board which is primarily made up of bankers and people from large organisations and quangos with one token IFA, Amanda Davidson.
As the IFA sector continues to control the majority of the distribution of financial advice in the country it clearly makes sense for more of the board to be from the IFA sector rather than from banks, quangos and other large organisations.
The boards of both the FCA and the the practitioner panels need more advice practitioners in them to bang some heads together and give us some sensible leadership and policies.
How bankers can continue to dominate these boards is beyond me. They have been responsible for one misselling scandal after another and have proven themselves to be highly damaging to the reputation of financial services in the UK.
In my experience most bankers are not even good at banking let alone financial services. Without government support a number of banks would have failed at the time of the financial crisis in 2008.
Banks also continue to dominate the complaints to the Financial Ombudsman Service and have done so for many years.
Despite repeated attempts by the large insurance companies and the banks to eradicate IFAs in the UK, the public continues to vote with its feet and choose IFAs in preference to these large organisations. Bearing in mind the make up of the boards of the regulators it is little wonder IFAs do not have a big enough voice.
Independent financial advice is fantastic for the public. Why? Because it promotes competition, leads to a reduction in charges and results in greater product innovation.
Interestingly a number of large banks have stopped offering face to face advice to their customers unless they have typically £500,000 or more to invest. Instead they are focussing on internet selling and that’s the rub. A customer to a bank is just that, a customer. Banks like to flog their customer products.
It has nothing whatsoever to do with professionalism, with giving advice and building long term trusting relationships which is what an IFA does. It is still about hitting those sales targets.
Go to your own branch and you will find young staff willing to sell you a product but if you ask them a question about banking you’re likely to get a blank stare back.
So come on let us have some proper IFA representation in the FCA boards and get rid of the bankers.
Tony Byrne is financial planning director at Wealth And Tax Management