The good, the bad and the ugly: A year in review

It’s been another busy (and in some instances raucous) year in financial services. While it’s been a positive 12 months in many respects for advisers, the regulator has again come in for criticism...

It has been a momentous 12 months. Abroad, the Arab Spring, Libyan civil war and eurozone debt crisis grabbed the international headlines, while the UK was rocked by riots, protests and a phone hacking scandal.

This was also a landmark year for the independent financial advice industry.
 As ever, regulatory matters took centre stage. Some aspects of regulation – such as HMRC guidelines on VAT and adviser charging, and the FSA consultation on legacy assets, brought much-needed clarity for advisers. But other parts of the regulatory machinery added to the confusion. Plans to ban both fund manager and cash rebates threw up the latest twist in the ongoing rebate drama.

With final charging rules not coming into effect until after 2013, platforms now face the spectre of an ‘RDR 2’. In terms of platform regulation, 2011 was a bad year.
Whilst platforms were trying to make sense of the FSA’s meanderings, the Treasury Select Committee (TSC) went into open combat with the regulator. In July, the TSC locked horns with Sants after the FSA dismissed its suggestion of a one year delay to RDR in what appeared a pre-emptory response.

The unsavoury episode served to raise the issue of the FSA’s accountability – or lack thereof – to parliament.  If the FSA had a bad 2011, the amount of money flowing into its coffers helped numb the pain. In December it slapped banking giant HSBC with a £10.5m fine for inappropriate investment advice by IFA subsidiary NHFA Limited. It was the regulators’ largest ever retail fine.

In April the watchdog fined Norwich & Peterborough £1.4m for giving unsuitable advice on Keydata products. Cue a long-running saga culminating in the recent pursuit by the FSA and FSCS of advisers who recommended Keydata products.
This was certainly a bad year for advisers who recommended  Keydata investments.

But the year also saw a spate of good company news. Hargreaves Lansdown entered the FTSE 100 whilst Sanlam Private Wealth shrugged off the market turmoil to continue its expansion plans. All in all, 2011 threw up a mixed bag of the good and bad. Let’s hope 2012 offers a more generous dollop of good.

Good year for...

• Tina Weeks – wins the Professional Adviser IFA Personality of the Year award
• Gold – Against a backdrop of economic turmoil the precious metal soared as investors sought a safe haven
• Platforms – Ascentric, Nucleus and Novia all hit profitability

 Bad year for...

• Hector Sants – slapped by the TSC for dismissing RDR delay
• Transact – year ended on low with £3.5m fine for client money breaches
• Traded life settlement funds – the FSA wants to ban their promotion to retail investors