Levy fears as FSCS revisits rejected Keydata claims

I believe you will find that the 0.5% of my turnover that has already been requested by the FSCS for this interim levy is just the tip of the iceburg as far as Keydata is concerned.

I wish I had got off with only 0.5%. I got scr*wed for more than 1% and it looks like I'm going to get asked for more. This is on top of the annual fees which will be demanded in a few months time. It's a joke but I guess in the interests of being fair we should pass these costs straight on to our clients.

It's about time the FSA looked at their own behaviour and fined themselves for incompetent regulation and paid this out of their own finances. They contributed to the mess so they should contribute to the costs.

I'm guessing it'll be a cold day in hell before the FSA pay anything themselves!

As the old saying goes, I like to get kissed before I get f*cked!

Now let me get this straight, I did not authorise, regulate, recommend, invest or indeed have Keydata round for afternoon tea, yet I am going to be asked for more money in this levy?

Seems fair....if anyone has lost money to an unscrupulous car dealership or property develpment scam, perhaps the Bulgarian ski chalet debacle, or maybe you've just mislaid you wallet, well I can help, my address is -

Cloud 9

Canary Wharf

London

FSA ***

Who is the faceless coward who is making these decisions inside the FSCS? Dick Turpin? I thought he was dead! They don't even have the courage to show their faces.

I suggest that we all refuse to pay this. If we stood together on this what could they do about it? They should be billing the FSA for regulatory failure.

The opening paragraph of the Statutory Code of Practice for Regulators reads thus: "Effective and well-targeted regulation is essential in promoting fairness and protection from harm. However, the Government believes that, in achieving these and other legitimate objectives, regulation and its enforcement should be proportionate and flexible enough to allow or even encourage economic progress."

The full document is available online at http://www.berr.gov.uk/files/file45019.pdf.

Evidently, the FSCS is either quite unaware of this statutory code or chooses simply to ignore it and no one's bothering to hold it to account. Statutory means defined by statute, i.e. it's the LAW.

AIFA ~ what are you doing about it?

Well at least there is one bright spot - at least the poor clients who got screwed MAY be compensated. Pity we had to have all this hoop la first though.

No wonder people won't save! The way this has been handled who can blame Joe Soap for thinking that financial services stinks. Thank you once again FSA and the FSCS for helping hugely for putting us all in ill repute.

Yet again it seems our regulator does exactly the opposite what it is intended to do - foster confidence.

I have never used a Keydata Product, but because I am predominantly an Investment IFA, my levy is more than 3% of turnover. We are supposed to be fair and principled, why can't the FSCS be the same?

Our additional levy is 2% of our turnover. So can I just pay a quarter of it, if the FSCS only need 0.5%.

I still fail to get their logic in lumping this levy on IFAs. Their argument is that Keydata, etc, were not product providers, therefore they must have been advisers. This would require Keydata to have been giving advice, which they most certainly did not.

This is like saying that as 2 plus 2 do not equal 5 it must equal 7 or because my car is not blue it must be red, ignoring all other possible options..

Its about time there was a legal challenge to this nonsense. The way The FSCS and FSA go about their busness and their inability to carry out their responsibiities correctly is staggering and an afront to the ordinary honest adviser. Something needs to be done and fast before they put us out of business competely. Oh sorry I just realised that was the intention.

I have spent a little time examining the regulated permissions of Keydata et al, as found on the firms register.

I then compared the regulatory permissions of my humble firm. A visitor from Mars would conclude that there is absolutely nothing to be found in common between the two.

If I had wanted to be authorised as a deranged financial alchemist I would have said so on my Form A. Commodities, futures, options, CFDs, spread bets, spot forex......................etc are of no interest to me, my advisers or, most importantly, to our clients.

I would bet that even a Judge in a civil court, a place almost as rarefied as Canary Wharf, would find that you had been mistaken as to where to categorise a Wizard of Oz firm like Keydata et al.

I and my advisers are Independent Financial Advisers. We advise ordinary people on how best to invest, borrow and protect.

We find it utterly fatuous that our regulator should have made such a resounding error and then, to rub salt in the wounds, demands that we pick up the bill.

You should be ashamed.

As usual on this blog - moan,moan moan!

How many of you people who are moaning about this have joined Regulatory Legal LLP's planned legal action to challenge this?

Stop moaning and DO SOMETHING!!!!!

Gareth Fatchett [Gareth.Fatchett@regulatorylegal.co.uk]

OR tell me why not to?

The FSA was told by the Chairman of KPMG back in 2005 that the Keydata sales brochures for the Secure Income Bonds falsely stated that KPMG created the financial model upon which the funds were based. KPMG told the FSA that KPMG did not do this modelling. (Guardian, 31 October 2009). Then who did?

The modelling, by the way, is the mechanism by which the notional growth is unwound into the fund, and is the key to avoiding the 'toxic tail' that is a primary cause of the products' problems when they arise. The literature was bogus, and now we know the fund managers removed and sold the assets. Wouldn't you be interested in finding out who wrote the brochures?

The FSA did not act in a way that would ensure IFAs were aware of this problem, as far as I know. By the way, HSBC also distanced itself from the products around the same time. Is there a case of contributory negligence to be answered here?

Perhaps there is a strong case for at least an FSA contribution to compensation, especially when seeking compensation from IFAs who did not advise their clients to invest.

We've joined and would ask everyone to join, now is the time to challenge these idiots.

Email

gareth.fatchett@regulatorylegal.co.uk 

It's horrible isn't it? You just want to keep a clean sheet and do a great job for your clients. Then you get hit with an unplanned MASSIVE bill for a firm that you never recommended.

Your choices are this:

Pay it and work like nuts to make it back

Don't pay it and lose your license

Join something like LLP and pay £300? for no guarantee that you won't have to then pay it?

The whole business is so sad. Everyone wants a piece of us! I have no solutions I'm afraid. Sorry! But please feel free someone to cheer me up on this!

the interim levy may well be the tip of the iceburg so the payment to regulatory legal to challenge may prove much smaller than the eventual problem if it is not nipped in the bud sooner rather than later.

I would rather loose my (was it £300, I can't remember) than accept be pillaged without at least fighting back.

We are all moaning because we didn't advise our clients to go into these investments. In my case we stay well clear of structured products as a rule and advised our client not to go near such investments but that's not the point of this forum.

I previously intimated in one of the citywire blogs that I would be interested to know how much money regulatory legal was prepared to put up as its share of the costs.

I haven't seen any reply yet but perhaps I have missed this so please feel free to let us all know as I believe we all feel as if we're getting shafted from all angles.

Oops.

My previous comment should have been directed at Rupert and not Gareth.

Apologies to all concerned.

If you could tell me one case that we have won in the past when challenging the regulator I will be happy to give it all due consideration again.

Its alright you saying we are moaning, yes we are but you are going to make money out of us for challening the judgement. Do we pay the levy, pay another levy if it comes our way and pay your fees as well only to find that we lose the judgement.

On balance and judging historically, we have to pay up and shut up because I don't see us winning anything they just don't want to listen.

I'm shocked at the defeatist attitude in some comments to date on here.

Of course regulatory legal offers no guarantees, any more than we do that our investment recommendations will only go up in value!

RL offers us the opportunity to attack our enemies where they are weak, our firm will be joining this week as an interested party and I would urge all other to do likewise.

There is a wider war in progress here between the forces of the bureaucratic state, embodied by the current government and its creatures (FSA & FSCS et al) and those who cherish personal freedom and liberty. The relationship between IFAs and the FSA is but one front in that war.

The definition of insanity is to do the same tomorrow as you do today - but expecting the result to be different!

'The tree of liberty must be watered from time to time with the blood of patriots and tyrants' - Thomas Jefferson (who I believe knew a thing or two about democracy).

For goodness sake join in with this attempt to stand up for ourselves. For only £300 each it could change the attitude of many for ever. The time to stand up and be counted has arrived. Let us make this a properly funded challenge.

For everyones sake fight and don't just sit there and take it!

Jeff.

you have lost the war already..... One way of NOT having to fight a war is to be willing to fight a battle and loose. A good example would be the Cold War............

Wait for your next FSCS bill without challenging this now at your peril

Glad you have now worked out how these blogs work (ie who sends them)!

1. I have never sold a structured product (other mistakes, yes - havent we all?) so yes I am not happy either, but now is the time to do something about it. £200-300 could be very small beer indeed by the time this is finished.

2. Why on earth should a law company dip into their pockets to represent us? Next time I write a will I must ask my solicitor for a contrbution

Best wishes!