Lord Turner - fee charges to large banks are proportionately small against the amounts paid by IFAs

 

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From: Simon Mansell
Sent: 20 October 2008 13:05
To: scott.sinclair
Cc: evan.owen
Subject: Lord Turner - fee charges to large banks are proportionately small against the amounts paid by IFAs

Lord Turner, chairman of the FSA, acknowledged in an interview with the Financial Times (FT) its fee charges to large banks are proportionately small against the amounts paid by IFAs.

I wounder if the press and the government know how strong the feelings are on this subject. We now learn the FSA has "NOT" been charging the banks as well as "NOT" regulating them! For years the IFA has been used as as a soft touch as the FSA (staffed by former bankers) consider their next IFA red tape business frustration scheme, and all of this in spite of the evidence! Consider the latest Financial Ombudsman Service (FOS) statistics on their website. These highlight how few compliants IFA's have compared to banks. The latest breakdown of consumer complaints for 2007/08:
 
Banks: 59%
IFA's: 4%
 
The headlines have majored on IFA complaints falling to 4%. However if we look beyond that we can see that excluding endowments the actual figure is 1.4% .
Independent Financial Advisers (IFA's) generate 80%* of distribution but are only responsible for 1.4% of complaints! 

 

There seems to be a conventional wisdom" shared by the chattering classes who unfortunately often repeat but but never challenge this wisdom. The problem being: "A lie told often enough becomes truth",
and certainly this FSA lie has found its way into the popular mind set of regulatory policy as evidenced in the FSA Retail Distribution Review, a scheme disigned to benefit the banks. The view that the FSA has peddled is that banks are good and IFA's are bad! Well events have caught the FSA with their regulatory pants down yet again! A very short time ago Dr Huertas, Director Wholesale Firms Division FSA summed this misguided belief up when he stated:  'Commission-based distribution arrangements tend to lead to conflicts of interest and may result in mis-selling." The Dr went on to say: "How do we solve this conundrum? We are genuinely interested in working with banks to find a way to do so." I might add this was before the banks fell apart under the FSA watch!  

 

Don't pay the FSA more money to a bad job ever worse start demanding value for money and "whole of market regulation" to include banks.   

Regards

Simon Mansell
 
Simon Mansell BA (Hons) Law 
Managing Director -

Temple Bar IFA Ltd 
 
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How much more is more?

 

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From: Simon Mansell

Sent: 18 October 2008 17:56
To: Owen, Evan
Subject: How much more is more?

Evan


How much more is more?

How do they get away with it? The FSA asleep on their watch are to be
rewarded with more staff on higher salaries. In fact the Conservatives
want them to be paid so well they will be on a par with the City Fat
Cats they were supposed to be regulating! This is required says FSA
chairman Lord Turner, to regulate the banks better! The truth is they
have not been regulating the banks at all never mind "better". The issue
is not regulating the banks better it's about regulating the banks in
the first place instead of kicking a soft IFA target.

How much more is more? The regulator already costs us more than £300
million a year. Its costs rose by more than 12% in 2007/08 and the pay
bill for its Directors grew by 22%.

Tell me, could it have been any worse if we didn't have an FSA, for sure
we would have been £300 million better off?

Regards


SIMON MANSELL

New Government Website?

Due to the financial crisis the Government is expected shortly to launch a new brand new website - www.notme.gov.uk.

 

Interested parties will be able to click onto the website as a handy “one stop shop” to see the most up-to-date explanations to questions such as why:

 

·         The Government, The Bank of England and The Financial Services Authority all failed to stop our banks building up a mountain of toxic debts.

 

·         “The head-rolling” is limited to a tiny group of bank chairmen and chief executives who have decided now is the time to jump ship.

 

·         Despite the multi-billion pound bank bail-out, there is no direct help for ordinary businesses, charities, public organisations, let alone ordinary taxpayers pushed up to and/or beyond the brink by bank and financial market failures.

 

Unfortunately, due to technical reasons, the website will not contain a ‘contact us’ section, and will instead invite customer feedback on a future occasion which is expected to coincide with the date of the next election.

  

 Typical.............but they, the FSA, were very interested in the font size of an IFA's Key Features Document so they know how to micro manage - pity about the macro bit! D.

Gordon Brown and boom and bust

"I will not allow house prices to get out of control and put at risk the sustainability of the recovery."
Gordon Brown's 1997 Budget Statement

 

"Under this Government, Britain will not return to the boom and bust of the past."
Pre-Budget Report, 9th November 1999

 

"Britain does not want a return to boom and bust."
Budget Statement, 21 March 2000

 

"So our approach is to reject the old vicious circle of the...the old boom and bust."
Pre-Budget Report, 8 November 2000

 

"Mr Deputy Speaker we will not return to boom and bust."
Budget Statement, 7 March 2001

 

"As I have said before Mr Deputy Speaker: No return to boom and bust."
Budget Statement, 22 March 2006

 

"And we will never return to the old boom and bust."
Budget Statement, 21 March 2007

The safety of banking

 

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From: IFADU[mailto:IFADU@googl On Behalf Of Simon Mansell
Sent: 10 October 2008 20:25
To: IFADU
Subject: [IFADU] Re: FW: The safety of banking

Per

 

Very interesting. I note the UK is ranked 9th is terms of financial sophistication & 44th in terms of banking soundness. This implies that a sophisticated financial sector tolerates a banking system with a lower ranking than Botswana. When I say tolerate perhaps I should say regulates!

 

In other words the FSA are not applying their resources to where the risk lies. Maybe too busy with the myriad of unwanted initiatives foisted on the long-suffering IFA. It would be interesting to see how regulatory costs per capita compare worldwide in order to establish if the FSA makes one jot of difference to our financial security for all the money they cost. Surely the one thing the FSA would rank highly on is cost! And remember it was the FSA who wanted to hand over a successful distribution method to a banking sector whose only claim to fame is a ranking lower than Botswana:

 

 ‘Commission-based distribution arrangements tend to lead to conflicts of interest and may result in mis-selling.”

 

And he went on to say:

 

“How do we solve this conundrum? We are genuinely interested in working with banks to find a way to do so.’

 

For a full transcript of his views click: http://tinyurl.com/52723z 

 

If you allow bankers to regulate bankers you have regulation by Croniism which equal no regulation for banks!

 

 

 

Regards

 

SIMON MANSELL

TEMPLE BAR IFA LTD

 

 

 

 

----Original Message-----
From: Behalf Of Caledonia Consultancy
Sent: 10 October 2008 15:10
To: caledoniaconsultanc
Subject: [IFADU] FW: The safety of banking

 

 

CANBERRA (Reuters) - Canada has the world's soundest banking system, closely followed by Sweden, Luxembourg and Australia, a survey by the World Economic Forum has found as financial crisis and bank failures shake world markets.

 

But Britain, which once ranked in the top five, has slipped to 44th place behind El Salvador and Peru, after a 50 billion pound ($86.5 billion) pledge this week by the government to bolster bank balance sheets. The United States, where some of Wall Street's biggest financial names have collapsed in recent weeks, rated only 40, just behind Germany at 39, and smaller states such as Barbados, Estonia and even Namibia, in southern Africa. The United States was on Thursday considering buying a slice of debt-laden banks to inject trust back into lending between financial institutions now too wary of one another to lend.

 

The World Economic Forum's Global Competitiveness Report based its findings on opinions of executives, and handed banks a score between 1.0 (insolvent and possibly requiring a government bailout) and 7.0 (healthy, with sound balance sheets).

Canadian banks received 6.8, just ahead of Sweden (6.7), Luxembourg (6..7), Australia (6.7) and Denmark (6.7).

 

UK banks collectively scored 6.0, narrowly behind the United States, Germany and Botswana, all with 6.1. France, in 19th place, scored 6.5 for soundness, while Switzerland's banking system scored the same in 16th place, as did Singapore (13th).

The ranking index was released as central banks in Europe, the United States, China, Canada, Sweden and Switzerland slashed interest rates in a bid to end to panic selling on markets and restore trust in the shaken banking system.

 

The Netherlands (6.7), Belgium (6.6), New Zealand (6.6), Malta (6.6) rounded out the WEF's banking top 10 with Ireland, whose government unilaterally pledged last week to guarantee personal and corporate deposits at its six major banks.

Also scoring well were Chile (6.5, 18th) and Spain, South Africa, Norway, Hong Kong and Finland all ending up in the top 20. At the bottom of the list was Algeria in 134th place, with its banks scoring 3.9 to be just below Libya (4.0), Lesotho (4.1), the Kyrgyz Republic (4.1) and both Argentina and East Timor (4.2).

 

RANKINGS

1. Canada

2. Sweden

3. Luxembourg

4. Australia

5. Denmark

6. Netherlands

7. Belgium

8. New Zealand

9. Ireland

10. Malta

11. Hong Kong

12. Finland

13. Singapore

14. Norway

15. South Africa

16. Switzerland

17. Namibia

18. Chile

19. France

20. Spain

--------------------------------------------

124. Kazakhstan

125. Cambodia

126. Burundi

127. Chad

128. Ethiopia

129. Argentina

130. East Timor

131. Kyrgyz Republic

132. Lesotho

133. Libya

134. Algeria

 

SOURCE: World Economic Forum Global Competitiveness Report 2008-2009.

 

See attached complete list and financial report

 

Per Oszadlik @

Caledonia Consultancy

27 Gloucester Avenue

Clarkston, G76 7LH

East Renfrewshire

 

Phone:  07717 130 031

Fax:    0141 638 8877

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THE SECOND GREAT PENSIONS RAID

Evan



THE SECOND GREAT PENSION RAID

Current thinking is to cease to contract-out with effect from the current tax year. The effect of this is that you will then accrue an entitlement to S2P for each year that you remain not contracted-out. The accumulated Protected Rights fund to date, which is the proportion of your personal pension plan that relates to contracting-out, will remain invested on your behalf. But do we need to think again?



When you contract out of the State Pension you individualise your National Insurance Contributions and have these paid into your own pension pot where it remains your money under your control. Contracting in or out is an act of faith. Recent market turmoil may breach this faith. Do you still feel the State can or will be able to provide for you in old age?



Cash Gordon, the architect of the first pension raid has been at it again and redistributing wealth behind the scenes … the wealth of middle England. Is contracting back into the State Pension such a good idea?
The earnings related pension is being done away with and national insurance contributions redistributed on a massive scale to the benefit of low earners but to the detriment of middle earners and middle England. Better then to have your own money in your own pension pot?



For the full story see Steve Bee's excellent commentary:

 "Beeline" http://tinyurl.com/4srlc9

Comment: I would like to acknowledge the source of this data. My very good friend and IFA Commentator, Brian Lentz raised these issues many moons ago and following the excellent article by Steve Bee, I felt compelled to give a voice to these comments.





Regards

SIMON MANSELL

Temple Bar IFA Ltd



Thought for the day: Who guards the guards?


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(that it was done for a very good reason and went no further than it needed to).

This letter/e-mail is sent in Open Forum and any response may be held in open forum.

UK bank deposits not guaranteed

Other countries are quelling depositor fears by offering unlimited guarantees for bank depositors.

 

The UK government is unique in world terms because it is constrained by the FSCS, this is the 'fund of last resort' for investors and it is the financial services industry which contributes to it, not the government. If the liabilities were unlimited the whole regulatory system would fall apart and so would those it regulates. Who can we thank for that? Ask Mr Brown.

Banks in Ireland have a practical regulator

 

Their banks were in a worse state than ours, the only difference between that country and ours is that they have a sensible regulator! It therefore follows that we need to look at our lack of regulatory common sense, but sadly that won't happen will it Mr Brown?

 

When you think that London is the centre of the Universe for fancy financial instruments yet our 'Masters of the Universe' McKinsey regulators have once again failed to spot a dead parrot!

The banking crisis

The current banking crisis was caused Western governments massively expanding the money supply in a time of economic boom, and compounding that policy error by leaving interest rates too low for too long. This gave bankers the opportunity to use leverage and a bull market to expand their balance sheets completely out of line with their core capital and to use opaque contracts to do so. This was aided by inept regulatory systems with divided responsibilities working on prescriptive principles acting as a form of nationalisation ‘lite’. Bradford & Bingley, a demutualised building society, acquired aggressive and inexperienced management and went adventuring in the credit markets to over expand the business, based on the illusion of ever upward house prices. These debt positions will now have to unwind. Market forces are telling us this by the prices of bank shares and currencies. Western Governments are issuing so much Sovereign debt to fund bank bailouts that sooner or later there is a very strong chance that one will default. The answer to this is either inflation to erode the value of the debts, or a massive cut in state spending and a reduction in taxation. As cutting taxes and spending are completely counter to Socialist thinking they will not happen under this current administration, and because they are also counter intuitive it is unlikely that the UK voter will elect a Government committed to such policies. Hence more banks will fail and many innocent, thrifty and genuinely prudent citizens will suffer. Rules are for the guidance of wise men and the strict observance of by fools.

FW: [IFADU] Mandelson !

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From: On Behalf Of Brian Foster
Sent: 05 October 2008 08:52
To: IFADU - The IFA Defence Union
Subject: Mandelson !

Gordon Brown under pressure to bring some stability and confidence back into the financial markets here in the UK brings back from the political wilderness of European politics the man he feels will do just that and put New Labour back into contention in the run up to the election in 2010.

Sub Prime lending has certainly had an enormous amount to do with the downfall of banks across the globe and at the centre of this both here and in the States has been the appalling lending criteria adopted by banks with stories of nine times earnings and fabricated applications. Liar loans as they have become known have obviously been ignored by lenders anxious to increase mortgage books which they have neatly packaged up and sold on to unwitting (or stupid) investment banks.

And so it is quite a “master stroke” then for Gordon Brown to herald the return of a man (former enemy and now “joined at the hip”), who showed scant disregard to the pre requisite of being honest when submitting a mortgage application, to become the Secretary of State for Business, Enterprise and Regulatory Reform !

I have been out of the industry for quite a while now but I know how I would feel if I was still trying to run an IFA business struggling to earn a living and with unknown increases in the ICS liability over the next few years, that this man, whose political career shows no sign of disintegrating around him as he makes a third come back and did not have to worry about the actions that he took, be placed in a position where he will be lecturing businesses and of course at the heart of still further Regulatory Reform !!!

No doubt Mandelson will soon be telling you all how to treat your customer fairly and that if you don’t then you will be closed down with no chance of a comeback into your chosen career… EVER !!!!!!!

Brian Foster - Kingswood (ex IFA)

Financial Services Authority - regulation is bust - not fit for purpose

 

 

Financial services regulation in the UK is a mess. The manner in which regulation has been set up and run has added to the crisis. It has regulated the wrong things in the wrong way very badly. It has increased risk. The main achievement of the FSMA 2000 is that compliance departments end up running the business. It works like this. A banker has an idea for a new product. He takes it to his boss. ‘Before I even look at this, can you confirm that compliance has seen it and approved it?’. ‘No’. ‘Get them to check it and then come back’. ‘OK’. Later. ‘Compliance says it complies’. ‘Right, is it going to make money?’. ‘Yes’. ‘Get on with it’. In other words the bank or whoever never really thinks about the product. It relies on its compliance department. This is no good as compliance departments are staffed by people who are attracted by rules. They are especially delighted when the rule books are wonderfully, convolutedly prescriptive. They can spend hours playing games with the language and the rules. If the rules can be satisfied by a check box system, even better. Common sense is evident by its absence. The current regulatory regime is not only useless with its divided responsibilities it is useless because it is prescriptive and wildly over-complicated. It needs to be scrapped. Simpler regulation, or rather supervision, by experienced market professionals would be far more effective. The FSMA 2000 must be repealed.

FW: Financial advice not the answer to pension crisis: O'Brien

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From: Evan [mailto:evan.owe
Sent: 03 October 2008 12:52
To: 'Sharon.Fla
Subject: RE: Financial advice not the answer to pension crisis: O'Brien

I hope IFAs collectively refuse to pay for the stupidity of others. We have paid for the LAUTRO debacle and still are, enough is enough.

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From: Sharon.Flaherty
Sent: 03 October 2008 11:53
To: evan.owen@
Subject: Re: Financial advice not the answer to pension crisis: O'Brien

Hi Evan do you fancy sendin me over a quick comment on the prospect of IFAs who fall under the category of "deposit takers" being hit with FSCS increased levies.

Sorry for the short notice, just finishng up article for the web and thought an IFA representatve r esponse would be good.

Thanks.

Best regards,

Sharon Flaherty
Online reporter
FTAdviser.com
sharon.flaher
0207 775 6656

Visit us at: http://www.ftadviser.com

"Evan" <evan.owen@if 03/10/2008 11:37

To <Sharon.Flaherty@ cc Subject Financial advice not the answer to pension crisis: O'Brien

Hi Sharon

Many people have retired early because they were persuaded to save for retirement at an early age by a salesperson, by the time they are 40 it is too late.

These people are naive.

However, given the retrospective taxation of pension funds are they now no longer attractive for basic rate taxpayers?


Evan Owen
IFADU
Preswylfa
Dyffryn Ardudwy
Gwynedd
LL44 2EH