Garry's Blog 13th May

Last Christmas, we appeared to have a clear horizon. The election was over. Boris had a solid majority. Those who has sought to undermine the will of the public had been rejected by the electorate.  

More importantly, this election result should have ended of the “We know best” alliance which had run the UK Government for three decades. At last, the Government could govern, and business could thrive. We could start to release business from the cold hand of regulation. Whitehall was solidly on the back foot and could only create a wall of dumb insolence in our discussions with the EU.

Here we are 6 months later. Much of business is shut down. Our liberties are trashed, and Parliament has been panicked into passing legislation that hands incredible power to every passing Gauleiter. From Whitehall’s perspective “if the Virus hadn’t existed, they would have had to invent it!” [Ed: enough already with the Voltaire quotes].

Politically, the big question is when will the Coronavirus Act 2020 be repealed? The obvious answer is when the virus is over. But this virus never going to be totally removed. Spanish Flu and its derivatives are still with us 100 years later – vaccines or no vaccines. 

Those who have been handed power will not want to hand it back. The “We know best” alliance’s greatest ambition was a world governed by unelected experts and that is exactly where we are now.

Closer to home what have the experts at the FCA got to offer? Since the virus appeared; It has issued 15 Press releases, mostly on COVID 19. The politically correct FCA cannot be beastly to the Chinese!

3 are warnings to public on scams and panicking - First class use of regulation - no arguments there.

1 is wittering on about climate change policies - Someone at the FCA must have time on their hands

11 are attempting to steer Insurance, Finance and Mortgage companies to courses of action without either the firms or the FCA having the full facts. The FCA is attempting to manage these companies but not taking any responsibility for that management. The FCA probably does not have the legal power to enforce such actions anyway, but when did they ever care about that?

Given the current world of lockdown, I have been getting involved with a wide range of Zoom meetings. 

IFAA has been a member of FECIF - Federation Europeenne Des Conseils Et Intermediaires Financiers or European Federation of Financial Advisers & Intermediaries in English for 3 years. This body currently pursues our lobbying on the EU, but the membership also includes non-EU countries like Switzerland and the UK. Last week, I was appointed a director of FECIF.

I have also been looking at the post lockdown political world. We successfully supported the advisers and the victims of the Connaught Fraud and helped set up an All-Party Parliamentary Group (APPG) which has maintained the pressure on the regulators forcing them to appoint an External Reviewer. Whether this review will lead to real change is still to be decided. I have little confidence that it will. This reviewer had his scope carefully chosen by the FCA and he is being paid by them.

One of the laudable ambitions of the TTF is to improve the reputation of Financial Services. It will not happen, and we need to go back to those FCA Press Releases to realise why.

This world is not just inhabited by the IFAA. There are several bodies and individuals who feel that regulation is a failure and one of those is an international group called the Transparency Task Force.

The TTF has large numbers of victims from a number of examples of regulatory failure. London Capital & Finance(£237m), Harlequin Property (£400m+), Lendy (£150m), Connaught (£106m), Funding Secure (£80m) and of course Woodford (£2bn-plus), to name just a few. TTF were about to set up a new APPG. as were we, so we hope to be working together when we can initiate the new APPG.

It may well be the case that most of these insurance firms may well have elected to take the same course that the FCA commanded. But now they have been told by the FCA to do so; they will receive no public kudos for their actions.
This is not an accident. For the FCA Empire to continue to exist at its current size, it must show the FS industry as being perpetually untrustworthy. Every time you pay the FCA you are paying a perpetual critic.

If you want to understand this; think of the Race Relations Industry which is now 50m years old.  

Question: When was the last time you ever heard a Race Relations Officer say that race relations were improving? Never – it is bad for their business. If you say that things are improving, you are talking yourself out of a job. So, it is with the FCA. 

To be fair there are elements in the industry that make this naysaying so extremely easy. All the discussions of changing culture and TCF are fine and dandy. but I do not see any evidence that Banks are no longer looking at their customers as cows to be milked. Nor do I see any evidence that the FCA staff will do anything to change this culture. It is bad for future employment.

So its back to another Zoom meeting. This time contributors from Bermuda, Hungary, Spain, US and Singapore.

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