From the Editor: Spotted a churner? Mum’s the word

The FSA wants whistleblowers to come forward – it even has a hotline – but is reluctant to act on the information it receives.

That was the allegation levelled at the regulator in last week’s issue of Professional Adviser, in an article written by our anonymous ‘would-be whistleblower’.

Andrew (not his real name) wrote that he had spoken to the FSA after suspecting an ex-colleague of churning pensions business, but was effectively told he would have to expose his business to FSA investigation first. No thanks, he replied.

It’s not that he had anything to hide, he wrote, but that he felt he would effectively have to close his business for two months or more while the 
FSA investigated.

“The regulator could have come in and done anything it wanted,” he wrote. “I couldn’t take that risk.”

It turns out Andrew isn’t the only one who thought it best to keep quiet after witnessing wrongdoing in the industry. Professional Adviser, IFAonline's print title, has heard from two intermediaries with similar complaints, and you can read their stories in the magazine in the coming weeks.

The FSA has guidance for whistleblowers on its website. It promises to “treat the whistleblower sensitively” and, where it can, protect their identity. Yet in practice it seems to fail to achieve the former, and all but rules out the latter.

This is a problem if the FSA wants whistleblowing to be a legitimate, respected method of exposing malpractice and to act as a deterrent. Anything else and it is inadvertently promoting a ‘Mum’s the word’ culture which, ultimately, will harm clients and the reputations of good advisers.

Scott Sinclair is editor of Professional Adviser and IFAonline.co.uk