Sants: Industry has not learnt from mis-selling errors

Misselling Misnomer

It is a very odd statement to say that Personal Pensions are in a list of missold products. How else are we supposed to fund our retirement? Similarly endowment policies were THE way of repaying your mortage when I was young and for several generations before me. It is particular aspects of the conditions of the time which temporarily make advice on the suitability of these products sensitive. To speak in blanket terms of products themselves like this shows a naivety which is not appropriate in a Regulator who should be taking a broader less tabloid view of financial planning

Posted by: snooks

Mis-Regulations

All advisers are disappointed the FSA soon to become the FCA has not learnt from mis-regulations. It has manipulate FSMA 2000 to interfere in UK plc and decimated the confidence of finanlcail services in every sector.

Posted by: Incompetent Regulators Awards Team

At last some truth!!

At last we have some honesty - not the view that mis-selling is continuing, but that Howard and Hector have failed as a regulator with massive resource and power to change a damned thing. Your 'increasing backseat role' should be welcomed if your analysis of your systemic failures is correct. We all know you failed miserably to monitor and regulate the banks and now you finally admit the reality that you have failed in every other area. Perhaps one day we will have a regulator who can stand proud of their achievements.

Posted by: Greg B

Sants' disappointment

I thought Sir Hector's only disappointment of his time at the FSA was that his remuneration package didn't (QUITE) reach seven figures! I bet he hates Gordon Brown - if his policies hadn't messed the economy up so quickly, the FSA wouldn't have had to reside over the banking crisis (leaving it to the FCA) and Sir H could have received an even larger bonus! To the first comment - Sheila means personal pensions over stakeholder and pension switching (not to stakeholder). Her financial crime division believe IFAs earning a living is the worst possible financial crime!

Posted by: You must be joking

drivel!!

i know its not constructive but just to look at this bloke infuriates me! Is he from another galaxy?

Posted by: Pele

Sants

The man is a half wit, end of story. Such sweeping unqualified generalisations are made only by the seriously dim. Typical of a man who has presided over the largest regulatory failures in the history of financial services. Taking a back seat in the future more like the dunce's seat !!! It's so easy to appear wise in hindsight Hector, but you already know that the FSA has always operated in that manner, give little or no useful guidance but use 20:20 retrospection to judge. He is as much a travesty as he claims the industry to be!

Posted by: Mr Skeptic

How Much?

How much has the cost of YOUR failure been Mr Sants. Better start looking within before pointing fingers.

Posted by: Swanny

IDIOCY

So Sants is taking a back seat? Well he should never have been driving. Best he gets shoved in the boot where nobody can hear him sticking his nose in to an industry he does not understand, and fails to even attempt to understand.

Posted by: Keith Jayne

Pratt

Sants continues to chip, chip, chip away at our industry - he really dosn't trust or like us at all - I wonder if he knows its reciprocated

Posted by: Aghast

Calm down - if you can!

This man has morphed into the consummate bureaucrat. It isn’t Tuesday today its two days past Sunday – according to him. For industry read the banks and the big outfits who work the numbers game and whose shareholders pay when there is a fine. The small IFA has leaned from mis-selling only too well – as FOS figures amply demonstrate. Can Hector say this is plain language – of course not! The banks are mainly owned by the taxpayer (at least Lloyds and RBS are) and as such we mustn’t upset them too much otherwise it may jeopardise their profitability. So they hypocritical message holds – the banks are allowed to continue to rip off as it’s in the public (taxpayers) interest. (Just watch what they’ll get up to with basic and simplified advice!) The fines don’t equate to the profits made nor do they really sanction those responsible. Rather a different picture for that which appertains to the smaller adviser – n’est ce pas?

Posted by: harry Katz

Watch with Big Brother

So is Canary Wharf - Hectors House? and yes Miss kiki he has been a very silly old Hector !

Posted by: A Victim

Think about it!

I could weep. The financial services sector and the FSA should both hang their heads in shame: in some cases the former are in denial and in the latter, they are ofetn simply ignorant of the facts. The poor reputation that the financial services has heaped upon itself over decades, is entirely of the ‘industry’s’ own making, if you flog product under the guise of providing advice and service, you will reap what you sow. The best thing that has happened to the sector is the twin initiative of RDR and TCF (if you don’t agree with this, then either you will go out of business or you will eventually wake up and agree with it). From the FSA’s perspective, they really must get a grip with what is happening. Yes, of course there are many firms/directors who are raising two fingers: they always have and they always will. And you’re telling me that this is a surprise? If you are “shock horror-fied” by all of this,why don’t you do something about it? Why do you allow firms to ‘phoenix’ themselves out of a mess, leaving so many clients and creditors out of pocket on the grounds that “it’s got nothing to do with us” as the FSA, it’s all to do with ‘corporate law’”. Hector Sants is apparently taking a ‘back-seat role’ from now on, how very convenient; to paraphrase parliamentary etiquette of times past: “I refer the Honourable Member to the answer I gave a few moments ago”. There is an abundance of evidence, both circumstantial and factual, that the financial services sector generally has embraced RDR/TCF and best practise, and to vilify them now is to litter the fields with mines just as the cavalry come to your rescue. The FSA must come to grips with reality. There are so many firms complying with best practise and have never knowingly disadvantaged their clients, so it’s imperative to identify them and put them on a ‘green list’. Meanwhile, when the directors of the phoenix company run off with their investors’ millions and then restart with a different name three month’s later, please spare us the patronizing response that: “there’s nothing we can do”. Finally, FSA director of enforcement and financial crime Margaret Cole, speaking at the conference, identified “personal pensions, mortgage endowments, split-capital trusts and payment protection insurance as products which had been mis-sold to UK consumers on a large scale over the past two decades”. Bravo Margaret! It is undoubtedly true that child labour was rife in the Victorian era, Tony Blair almost certainly took us to war in Iraq on dubious information, and that PPI was almost exclusively sold by the banks (ahem). Please, please, talk (and listen).

Posted by: Neil Shillito

Learning from mis-selling

To snooks Sorry old boy but endowment mortgages were not THE way of paying off your mortgage when you were young or for generations before you. The full non profit endowment ones were foisted onto the public by banks, building societies and insurance companies as a quid pro quo for placing difficult mortgages and they were not heavily marketed but at least they did pay off the mortgages. The low cost variety only came into existance around 1971 or 1972 and I believe was invented by the Royal. This was when the mis-selling really started. The banks, building societies,insurance companies, estate agents,newspapers and other media all went into overdrive with their marketing and convinced the public that this was the only way do a mortgage but they never fully explained the products to the public or told them that there was a chance they may not be able to fully pay off their mortgages at the end of the term. Yes I know that for many years they did do the job and also produce surpluses for people but the possible downsides were never fully understood by the public and the banks, builing socities,insurance companies, estate agents and brokers never went out of their way to enlighten the public because they were such good earners for them. I once had a guy at a local estate agents tell me in 1985 I was a fool if I did not do a low cost endowment mortgage and for years after that the Nationwide regularly attempted to get me to switch from repayment to endowment, through them of course. I came across a client sold an L & G one by an estate agent as late as 2002. Some of us saw through the product

Posted by: John Smyth

You heard it here first

I actually agree with Sants in that the product churning, new business chasing financial sales industry that is dominated by the high street banks, has not learned at all. Nor will it until some really intrusive regulation is applied with senior managers being held directly responsible for the failings. I believe the vast majority of professional independent advisers and planners have significantly changed their business models,ironically many had despite the RDR, not because of it. Whilst it would be niave to believe there are not still some firms operating on big commission ticket sales, professional firms have moved on.

Posted by: Duncan Carter

Unpalatable but TRUE!

Mr Sants is unfortunately spot on and we all know it. Bad atitude towards customers still exists in our industry in too many cases. No wonder large swathes of the public who should be the clients of IFAs won't go near them with a barge pole! Hector Sants is correct.

Posted by: Shaune Greene

Not Very Palatable but TRUE!

Hector is right. We all know it. It's an unwelcome truth. No wonder large swathes of the public who should be customers of IFAs won't go near them with a barge pole.

Posted by: Shaune Greene

I agree

The financial sales industry that is dominated by high street banks will carry on flogging products to all and sundry until something meaningful is done to someone of significance in these organisations. A culture of fear for not selling and rewards for high sales is never going to be conducive to a good outcome for a client irrespective of the points!! Without being naive, I believe the majority of independent advisers and planners have either changed or adopted to a client focussed proposition which is far more professional than industrial.

Posted by: Duncan Carter

snooks and crannies

snooks is correct. people in the 70s and 80s used endowments to pay off their mortgages and early endowments had guarantees built in, so shortfalls didn't happen. I know, I had one! people were enciuraged to take out pension plans and MIPs because they were encouraged to save. Ever since 1997 when the world turned red, saving has become a joke, the house one owns is a giant ATM to borrow off and credit card/personal lending is well over 1.1trillion. Sants has missed the plot, left right and centre. But he has another golden parachute as well as two cushy numbers, one in the UK and the other in the EU. His type makes Bob Crowe at RMT look like a proverbial virgin!

Posted by: peter sutcliffe

Tied agents and direct sales

Most of the misselling (but not all) was done by direct sales forces and tied agents. When I started working for a tied agent (you had to serve two years before you could become an IFA) in the late 80s my boss used to hold seminars for training college students to encourage them to opt out of the teachers pension scheme as soon as they started. I looked at the figures and concluded that not only was this a ridiculous selling practice but also the notional growth rates on teacher contributions in the TPS were unsustainable for taxpayers to continue funding. I confined myself to selling endowments and life cover and the occasional investment bond. I had confidence in with-profits endowments. My own policy doubled the target amount for the purchase of our first house.

Posted by: Ken Durkin

CLUELESS!!!!

Look no further than the banks & building societies for the main culprits. RDR is playing straight into their hands & the latest statement from Lloyds backs this up. Too many banking institutions CEO's have the ear of the regulator and have been allowed to continue to "do business as usual". The statement from Sants is rich to say the least. RDR will be the biggest disaster ever in the financial services market playing further into the institutions hands with no competition left. TOTALLY INEPT!!!!!!!!!!!

Posted by: David Hatton

He's a Fanny

As my three year old would say.

Posted by: Paul Burnside

FSA

You might be humoured by this: http://www.financialservicesauthority.org/

Posted by: Harry