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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