______________________________________________
From: IFADUgooglegroups.com On Behalf Of Dave Chaundy - The Grosvenor Consultancy
Sent: 22 May 2008 13:38
To: IFADUgooglegroups.com
Subject: [IFADU] Hunt Report
Further to my earlier post re Lord Hunt - I have now received a copy of a letter from Mark Bonham - Shadow Financial Secretary to the Treasury, sent to my MP in response to a letter of mine to my MP about the RDR and Hunt Report.
As usual the letter contains no significant content other than the usual platitudes but I intend to copy Mr Bonham in on correspondence with Lord Hunt.
In that regard I attach a first draft of an email to Lord Hunt. I have intentionally limited comment to the 15 yr long stop and have concentrated upon retired IFAs in order to highlight the hardship caused. This is intended as an 'opener' for future discussion -- we shall have to wait to see if he is interested enough to ask for more information.
Meanwhile i am still happy to hear from any IFAs here who wish to have their thoughts and comments passed on to Lord Hunt. Or indeed any comments on the email reproduced below:
To: huntdparliament.uk
Cc: Richard BENYON
Subject: The Hunt Report on Financial Services regulation.
Dear Lord Hunt,
My MP, Mr Richard Benyon, has, I believe, spoken with you regarding some correspondence I have been having with him and he has kindly provided your email address so that I may contact you. Thank you for agreeing to hear the concerns of one small firm of IFAs.
I do not intend at this point to debate all of the issues contained in the Hunt Report. I accept that you will have given serious thought to your conclusions and thus are unlikely to be swayed at this late stage to change any of the contentious aspects of your report. I would however like to bring to your attention some of the human aspects of what, prime facie, would seem to be entirely reasonable conclusions on your part, but which can impact unfairly and inappropriately upon honest and genuine individuals.
For background information I have worked in the Financial Services sector all of my working life (now some 40 years). I have been an IFA for 15 years of which 13 years was as a Sole Trader. This latter fact is relevant to the most important aspect of client/IFA relationships i.e. that of mutual trust, and the failure of the FSA/FOS and the associated regulatory framework to understand the mindset of a firm or individual such as I.
Until recently I have never seen any need to shield my responsibilities to my clients behind a limited liability. I accepted that as a Sole Trader my entire net worth as a human being was my client's guarantee of probity. This gave me no cause for concern, as i knew in my heart that I acted at all times in the best interests of those clients, with no self-interest being permitted to pervert my advice or conclusions.
This was until an industry peer, whom I have known as a similarly motivated and trustworthy individual for many years, fell foul of the regulatory morass and found himself little more than a piece of 'collateral damage' drowning in the waves of the regulatory flood.
This individual was also a sole trader, now forcibly retired. A case brought by the FOS against him has been to County Court where he lost, and has been to appeal, where he also lost. It is likely to go to the final stages of the legal system and ultimately to the European Courts if necessary. The UK legal process must be exhausted before the unfairness of the Statutes can be tested in the Court of Human Rights at considerable expense to a retired practitioner.
I would be delighted to set out the full detail of what has happened to this man, who is now close to nervous collapse through no fault of his own, and through no proven failings of advice, or breaches of regulation, or even proven 'mis-selling'. The County Court Judge commented in his decision "where natural justice comes into this I have no idea but it is pursuant to Statute". This perhaps is not the place, however, to detail my friends sad story. Let us merely hope that he survives long enough, physically and mentally, to reach a final resolution and hopefully 'natural justice'. Suffice to say that his experiences led me to switch my own business to a Limited Liability company, hardly an improvement to the protection of my clients, but a necessary action for the protection of my family.
The above is only one amongst many cases where retired sole traders are being pilloried (I can provide chapter on verse on many such cases). I refer to this solely as an indication of the potential impact of denying to the IFA profession a Statutory protection which is afforded to every other business and individual in the UK. Ignoring the inherent injustice and unfairness of the FSA and FOS, which is undeniable in many respects, a 15 year long stop on complaints would go some way to enabling Sole Trader IFAs to retire with at least the prospect of some respite in his dotage.
Please bear in mind that the Rules and Regulations of the FSA and FOS are not routinely distributed to persons not currently regulated - they have therefore no way of knowing what impact changes to rules, sometimes retrospective in effect, will have upon their situation. They also have no way to deal with Pension Reviews, Endowment Reviews etc. because they are not made aware of the need to do so. Even if they were aware, is it reasonable to expect that an elderly person, possibly suffering from mental deterioration or Alzheimers at age 90+ should be able to negotiate the complexity of DISP rules etc?
Your reasons for maintaining this refusal of the statutory protection of a 15 year long stop to IFAs are based upon 'consumer protection' but ignores the genuine hardship it imposes on individuals. I would ask that you give some thought to the FSAs own current mantra of Fair Treatment - not just to customers but to all. Professional Indemnity Insurance (your suggested solution) is NOT easily obtainable for a non-authorised individual.
There are many other aspects of your report upon which i would wish to comment and am happy to do so, but I am restricting this already lengthy missive to the sole issue of the 15 year Long Stop. I will happily provide you with copious detail and numerous specific case histories of how the regulatory minefield has caused untold hardship and damage to many innocent victims in this industry.
If you are genuinely concerned to ensure a fair and just framework of regulation then I have no doubt that you will request more evidence from me of how it has failed to date. I will therefore end, and await your response.
Grosvenor Chaundy
The Grosvenor Consultancy
Registered in England No 4395951. Registered Office 78A Chapel Street, Thatcham, Berks. RG18 4QN
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Registered in England No 4395951. Registered Office 78A Chapel Street, Thatcham, Berks. RG18 4QN
‘The Grosvenor Consultancy’ is a trading style of Grosvenor Independent Financial Ltd, an appointed representative of The Whitechurch Network Ltd which is authorised & regulated by The Financial Services Authority
IMPORTANT - The contents of this e-mail message, including any attachments, are intended and authorised for the sole use of the person or entity to whom the e-mail is addressed. The information in this e-mail message, including any attachments, is confidential, and may be subject to legal privilege. Unauthorised use, dissemination, distribution, publication or copying of this communication is prohibited. If you have received this e-mail message in error please notify the sender (either by return of e-mail or by telephoning us on the relevant number shown below) as soon as possible and delete any copies and any attached documentation. This message is attributed to the sender and may not necessarily reflect the view of Grosvenor Independent Financial Limited.
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