FSA: Industry has 'itself to blame' for low consumer confidence

Not sure I entirely agree

I understand why Tracey would say this. There have really been too many episodes of mass consumer detriment. But we also need the new regulators to stand up and be counted because alongside industry failure there has also been massive regulatory failure. Unfortunately it does seem to the regulated that there has been little or no accountability amongst the regulatory staff for their failure. Whether that it is the case or not perception is that is the case. What the FCA needs to do is massively simplify the regulatory world and that probably means scaling it down rather than taking on greater resources and increasing the cost to the regulated. Are they talented enough to do that? If they are there will be consumer advantage to be gained

Posted by: Nick Bamford

No blame attached

I quite agree. Think of the litany of disasters for which we are responsible: RBS, KeyDate, ARM, I mean the list is endless.

Posted by: Neil Shillito

Lies lies and more dam lies

The blame game is being played here. They need a good look in the mirror. Consumer confidence is at a low because of the mis-regulation and negative mantra that has constantly come from the F-Pack.

Posted by: Incompetent Regulators Award Team

Usual Self-Serving Nonsense

As you would expect this is an epically ignorant rant from someone whose livelihood depends on the contuining demonsisation of 'financial services' by the likes of her and her colleagues. I do not doubt for one moment that somewhere, right now, someone is being badly advised, and making bad decisions because of that advice. At the same time I am also absolutely sure that the FSA apparatchiks are no more wise than any other practitioner and will, and have, made as many and in lots of ways far more damaging errors. Precipitating the near failure of the financial system by their incompetence and landing us with debts of £1.2Tr will do for starters. Taking a few extreme examples out of context is always good sound bite for the meeja but they do not represent the vast majority of the financial advice and other financial transactions that take place. No regulator has any skin in the game and is entirely unaccountable; legally or democratically. Consequently they have no market function. Therefore their interventions create chaos in the spontaneous order of free markets - as we have seen since 2001. What this rant is all about is securing a comfy future for her and her partners in crime. It is disgraceful

Posted by: Steven Farrall

Oh Really

Interesting that Ms McDermot has picked as examples some very limited specific cases. Whilst obviously the sales would appear to be suspect, they effected only a very small number of people. Where of course we must trust the FSA, an organisation that so monumentally failed in its roll of regulating the Banks that the whole Country almost went down the tubes. Double standards?

Posted by: Obiwanbruce

Glass Houses

Unfortunately Mrs McDermott has not heeded the lessons of the past failings of this regulator and or previous regulators. People in glass houses should not throw stones! When you point a finger you have three fingers and a thumb pointing back at you. There are massive failings on all parts, but why keep focusing on the negative, lets look at the positive that in particualr the advice sector has achieved.

Posted by: Stephen Holloway

Make sure your hands are clean first.

Nick, if I keep agreeing with you like this we may need to get engaged! If the Regulator and FOS and the FSCS are counted as being within the industry then they too must surely shoulder some of this blame. I’m sure I speak for many when I say that I don’t encounter this problem with my clients or those referred to me. Indeed if we are held in the sort of esteem that this lady alludes to one wonders how we have any clients at all. I would say that it is the banks and indeed the Regulator who are held in pretty low regard by the general public. I concede that there are some appalling examples (as she has highlighted) but I would say that as far as IFAs are concerned this is a tiny minority and in the real world you are never going to have a 100% success rate. There are appalling tales one can tell about doctors, lawyers, accountants and all sorts of other occupations, but we don’t seem to get the handwringing we get with financial services. I put this down squarely at the door of the Regulator who needs to show that they are doing something, and in so doing, seem to do more harm than good. After all a bad doctor kills people – we haven’t yet been accused of that! Harold Shipman didn’t taint all doctors so why should a bad IFA taint the rest of us?

Posted by: Harry Katz

Holier than thou

What she really means is, the regulator has failed to meet one of it's core objectives,consumer confidence. Since the same regulator is unaccountable, it follows that passing the buck to the lowest members of the food chain who are easy pickings, is the only option. Who I wonder, in her opinion, is to blame for the non existent confidence in the regulator? Or is she saying that the regulated are so lawless, that the regulator is powerless to make a difference?

Posted by: Confused

Calm reflection

I'm unsure as to the objective of these comments as no-one in their right mind is going to try and defend the examples quoted, simply because they are indefensible. It is right that such activities are identified and dealt with appropriately but therein lies the rub. Whilst sections of the financial services 'industry' has undoubtedly been guilty of inappropriate behaviour, it has been heavily and expensively regulated for many years. In this context, professional planners have raised the standard significantly but the mass distributors have carried almost unchecked. The scandal that is the mis-selling of PPI is one example and reckless lending another. The reason why the financial service sector has a poor standing right now, is largely because certain elements are still earning massive amounts whilst the ordinary guy in the street is paying for it. I think a more constructive approach in the spirit of detente would yield a better outcome where likeminded people work together to improve standards for everyone.

Posted by: Duncan Carter

FSA

"I agree with Nick" Let's hope that the new pre-emptive regulation, heads off the abundant mis-selling scandals. Everything else was just Tracey talking up her new job. If the new regulation fails there will be no-one else to point the finger at. So let's hope that thought keeps the new FCA on their toes.

Posted by: MarkG

Self Serving Nonsense

I simply couldn't agree more with Steven Farrall's post. After over 25 years in the industry I have seen them all with their many different faces. The damaging interference really has gone too far. Next they are going to hammer the final nail into the coffin that is the mortgage market. Look like all roads lead to working at Tesco's to age 73.

Posted by: The Regulated

Pot Kettle

Perhaps the regulator should look closer to home. A4E, which handles millions of pounds worth of government contracts for welfare to work schemes, and is the chosen delivery partner for The Money Advice Service has just had 4 ex members of staff arrested on suspicion of fraud at the company. Will we be able to claim from FSCS if our levies have been missapropriated?

Posted by: sickofsants&co

another rant from a FFF jobsworth

I have no idea who this woman is or what job she does (other than acting as a mouthpiece for a failed regulator). I would like to know exactly what qualifications and experience she has since most of those working at Canary Wharf are totally ignorant of the important role IFAs have in protecting people from the avarice of the banks and the greed and lies of HMRC and government. I suspect she is just another over-paid, under-qualified jobsworth who has a string of unmitigating failures listed on her CV.

Posted by: Bill Wells

FSA continues to duck the real issue

Prememptive regulation is only credible if those who are reghulating know what they are looking for and know what they are doing. The issue as has been pointed out so well is the surplus of regulation financial services ar presently subject to, and the blame game being continued by regulators the Bank of England and politicians. Of course the examples are totally stupid but what were the FSA doing all along, where were they when leadership was required, did they actually know what they were doing. This is not a jibe at the lower levels but a direct hit at those in charge many of whom are still there. There can be no progress in financial regulationm until teh present motley crew at the highest levels are cleared out because their mindset is just not capable of unbderstanding what really goes on.

Posted by: Robert Marshall

We are all to blame.....

...the regulated and of course the regulators, consumers too, we can all pick prime examples of bad advice which will continue post RDR but ineffective regulation will also remain the major issue for consumers who are lulled into a false sense of security, taking more risk than they normally would. The FCA needs to be differenet, but how? History is clear on this, the same rulebook with a couple of tweaks won't have the desired effect, the same mindset among regulators won't inspire confidence and neither will the propensity for using spreadsheets and computer models, such activity certainly won't help regulators who need to get to the coal face and do some digging if they are to be "pre-emptive".

Posted by: Evan Owen

Struggling are we

Talk about clutching at straws Tracy !! We all know of isolated cases which are quite appalling. Just look at RDR and TCF ? The thing is ! you and the FSA think if your dog does a poo on the carpet the only way to stop it is to sew up its backside. Nice try but way off the mark

Posted by: DH

Why can't they just leave us alone

What? These people are beginning to make me really very angry. I won't re-list all of the big failures that they have missed but maybe if the FSA started to regulate proportionately to the risk involved they could leave 99.9% of IFA's alone and concentrate on banks and investment houses. If I go on a mis-selling spree I can probably have in impact on 100 people...and, like me, most of us are trying to build a long term business not make a quick buck.

Posted by: Soren Lorenson

In their own words...

From the website: "We were given four specific, and equal, objectives by Parliament. These are: maintaining market confidence...

Posted by: Rudolf Bultmann

I agree with Soren

"If I go on a mis-selling spree I can probably have in impact on 100 people.." And that is looking at the very worst case scenario! One of the FSA's major objectives was supposed to be to point it's resources towards 'areas' that can have the greatest potential financial impact on the general public. It appears that this objective got lost somewhere in the ether. I despair!

Posted by: Nick H

Tripe

I thought that we had plumbed the depths of self serving, ill informed, industry bashing clap trap from Turner, Sants and co, but this cretin takes the biscuit. Why can't the powers that be see whats happening and do something about it. It will be too late in a few months

Posted by: Bob

Tracy ...approx 20 comments to date and still accumulating

Well Tracy, you really have stirred up the feelings now. How self-rightious of you, and all the FSA Board. As has been said above, what exactly is 'it' about you and Turner, Sants et al that allows you all to be 'qualified' to hold such positions of power and influence at Canary Wharf. Your pay and benefits are astounding, and the commons link between you is that you MAY all have Legal qualifications ....because that makes 'sense' to Number 11 Downing Street. However, such legal persepectives have proven impotent in preventing a long list of disasters, usually spawned by the Banks. All FSA staff are on a total 'winner' in terms of pay and benefits which resemble no benchmark to the real world, and what exactly do you do that is of any value to the customer ?

Posted by: Graham

Look at yourselves before blaming others

"Why did advisers tell clients to invest in products they themselves did not understand?" Just One extract from what you reportedly said. Maybe I could ask YOU -- "Why did Banks market products that neither THEY nor the FSA understood?" or "Why did they FSA not require a greater understanding of the risks of products from its own staff?" It is OH SO EASY to sit in your Ivory Tower and pontificate in retrospect - blaming those that have least ability to reply. Get out there and DO SOMETHING!

Posted by: Grosvenor

FSA & FOS - Shame on you

Many IFAs do a first rate job for their clients,giving a high level of service and not all charged for. It is the actions of FOS that have caused so many problems in our industry,by suggesting that firms which complied with all advice requirements at the time the advice was given, that their advice was “unsuitable” (rather than negligent) which has contributed to the savings gap and the fall in consumer confidence. If a case is paid out the client will never do any investments again – why would they? And they will tell their friends to complain too! It is the FSA and FOS that need to be named and shamed. E.Dante

Posted by: E.Dante

Taking the blame

Perhaps the industry would have more regard for "ivory tower" statements if they were actually deemed to be based on Fact. Most of the disasters have big Canary Wharf fingerprints all over them. If they stood up and said we got A B & C wrong, we are sorry, we have learnt X Y & Z then perhaps going forward their views would be respected. To pick on just one recent example, the Keydata Fiasco. If they put their hands up to that awful mess and publicly agreed IFA's were undermined by poor FSA actions and reporting. And by the way, that the FSA accept that, by allowing Keydata to continue marketing their flawed plans after the FSA knew they were flawed but didn't pass it on to the industry, they are culpable. The FSA should also publicly point out the FSA's COB rules 2.3 which clearly exonerate IFA's from the Herbert Smith claims and to send the bill to the FSA. If it wasn't in the brochure then IFA's are not liable.

Posted by: Bitter and twisted