New regulator outlines plans to name and shame offenders

Consumers being allowed to make an informed decision? Well I never....

Translation: They will ruin an IFA's business without a fair hearing.

@ Man In Black - Surely you're not suggesting the Regulator takes a Guilty Until Proven Innocent stance....

But what about the reputational and commercial damage to a firm if the FCA's plans to censure, fine and suspend don't actually come to pass or are overturned on appeal? For having jumped the gun, will the FSA publish a retraction or an apology or pay compensation? Or will it just shrug its shoulders and say "Oh well...."?

Further translation: the FCA will be able to ruin ANY IFA’s business without ANY hearing, fair or otherwise.

And by the time the IFA could have a chance to defend himself the income base from which he could expect to do so will have gone.

It is simply an easy way for the FCA to prevent an IFA from the normal Human Right of being able to defend himself.

Further, in those cases where FCA decide that a censure is appropriate they will brand the IFA as “lacking integrity” which in regulatory-speak means failing to comply with the rules – a charge which the IFA will not have the opportunity to defend himself against before it is published in the Warning Notice on the internet.

To the outside world, being the people who will Google the by then former IFA when he is looking for a job as an admin assistant somewhere, “lacking integrity” means he is a thief. Thus no interview let alone any job.

There will be those who read these pages who will no doubt trumpet that because they have never been on the receiving end of the FSA treatment then they personally have nothing to fear from the Regulator, and feel justified in the holier-than-thou position that anyone who is under the FCA spotlight deserves all he gets.

But I can say from experience that not everyone who is under the FSA/FCA spotlight deserves to be there.

If Abu Qatada is allowed, at the taxpayer’s expense, to defend himself against deportation then I have to confess to failing to understand how our politicians can deprive IFAs of the same basic right.

FCA names FSA.

They were quite useless as a regulator, says several hundred FCA insiders. The last 10 years funding would have been better given to Cyprus!

It was only yesterday I read that the FSA themselves had been told to apologise for being assumptive about guilt in respect of an IFA they were looking at, they were aggressive and arrogant and disbelieving of the IFA's statements....under the new regime they (the IFA) may well have been 'named and shamed' beforehand!

FCA blames its predecessor to obtain more power

Please all note that the FCA is in fact exactly the same legal entity as FSA - it simply changed its name.

They are not separate legal persons.

Indeed, its the same legal entity as the 'Securities & Investments Board'.

As an anside, anyone know when we change our letterheads?

HMP Pentonville

Caledonian Road

London

N7 8TT

Do the FCA enjoy the same statutory immunity from prosecution as their predecessor?

If so the possibilities for malfeasance in public office are astounding. Make no mistake, the FSA do get things wrong. The damage that can be wrought from such an opportunity to defame is extreme, and any weakening of legal protection from such is deeply worrying.

That thought process is, however, confined to my liberal, touchy-feely, apologist, muggins side.

Remembering the agonising slowness of action by the FSA over Keydata, Arch Cru, Integrity etc etc I could happily allow internment without trial for all concerned!

Only joking!

@ Matthew S

"Guilty until proven innocent"

I suspect that it's more a case of 'guilty until smeared as guilty'.

I openly told the FSA I was drafting my Client Agreements to include a contractual 15 Year Long stop and met all manner of threats from the FSA implying that relying on a common law right to a longstio is an "unfair contract term". I asked how common law can be an unfair contract term which the FSA were not able to answer so I stuck to my principles, put it in Our Client Agreement and sent a copy to the FSA (that was 3 years ago). Since then nothing......

Bullies.....

Alasdair Simpson and MIB - Is this the case? I'm not a lawyer and had assumed that one of the reasons for the relatively frequent turnover of regulators was to 'draw a line in the sand'.

Does this mean that FSA inherited SIB's et al's liabilities and that FCA will also do the same regarding the FSA?

I seem to recall a case where two firms with a similar name were confused by the FSA thus blighting a totally innocent company. This was raised in the TSC RDR interview of the now departed Sants & Nichols.

Despite requests going on for years, the FSA seemed incapable of setting the record straight.

Worrying times..........

@ Duncan Carter

Yes, basically.

Who is going to step up to the mark and argue adviser's case on this. AIFA or what ever they call themselves ? CII/PFS. IFS. IFP. IFA Centre it seems that we are toothless against this rubbish.

The very act of naming a adviser or business before proof has been found means that they could go under before and not be able to effectively manage any complaint or claim, thus tipping them into the FSCS arena, guess who will then have to pay.

It's a never ending spiral of tangled webs designed to entrap and smuther the Advisory community.

Where is this all going to end ?

And will they, as is proposed in the new regulation of the Press, be liable to pay damages of £1million when they name and shame the wrong people for the wrong reason and ruin a good business?

@ David Curley

@ Mike Morley

Yours were rhetorical questions, I assume?

Alisdair Sampson.

Probably like a cry in the wilderness, no one is really listening except the wolves !

@Duncan Carter 2

What "liabilities" would they be then? The risk of receiving a knighthood perhaps? A fat pay cheque from a bank that you "went easy on" whilst at the regulator? The chance that you can give dismissive and sneering answers to our elected and accountable representatives in Parliament?

What a wonderful new procedure! At last, the FCA can name and shame those who are percieved to be acting fast and loose with clients money in order for them to line their own pockets.

Yes there are flaws, the wrong firm can be identified, a notice could be issued in error, but this is no reason not to applaud the rationale behind these new powers.

The example given that a small IFA who has been investing some of clients money in high risk (often fraudulent) investments may be able to delay publication if it was felt that the firm would go into recievership if published is ridiculous. If a firm recieved notice of in-depth investigation into its fraudulent investment recommendations, it would go into liquidation anyway, and apart from a freeze on all assets, there is little that can be done to stop it until a fairly high level of guilt can be proved, so I say publish and be damned.

The police publish who they arrest and on what charge if they are suspicious of someone breaking the law. As long as their suspicions are reasonable, there is little comeback, even if the case is dropped. So the same logic should apply to regulated firms and individuals. If a name and shame turned out to be totally spurious, then by all means hire Alisdair as your solicitor. But if you have been behaving yourself, acting with honesty and integrety with your clients and the regulator, you have little to fear!

Hickky, "if you have nothing to hide you have nothing to fear" is a dangerous fallacy.

An unaccountable quango is being given the power to effectively shut a firm down based on a suspicion.

Just because the Police are allowed to destroy someone's life, that does not mean a financial regulator - which has only excelled in failing - should have that power.

Perhaps instead of the power to "issue a notice" - which could put real people out of real jobs - how about the power to insist that all advice is pre checked by the FSA? They won't do that, though, as it would mean they had to take responsibility for their actions. Taking responsibility for their actions is one thing the FSA singularly fail to do.

Although past performance should not be seen as a guide to the future, the FSA fail. They fail in big ways and they fail consistently. If they were airline pilots they would not be allowed to fly a plane.

Ask yourself - when was the last time you saw an honest, well meaning firm get referred to the RDC?

Well?

Check the decision notices over the last 6 months - it's a mixture of clueless banks and tiny adviser firms trying to get away with murder - there just isn't cases of decent people getting crushed for an honest mistake - it's John Smith trying to sell UCIS to pensioners or make-believe 'insurance' cover.

@John Frink

I have known the RDC to both (1) reject substantial portions of the FSA's case; and (2) reject the FSA's case outright. In these instances, the points obviously do not reach the Final Notice as such a Notice is issued only if the end result is that the FSA's proposed action stands.

In one case I know of, for example, Enforcement went all the way to the RDC trying to make a case against one firm, based on sales made by another firm.

I understand that the naming and shaming firms would include the crime of inadequate systems and controls.The trouble there is, the regulators are the judges and their demands are entirely their own. They will ensure that their view is the right one, even when no clients have been affected and probably would never have been affected. A business and livelyhoods would be ruined.

@ John

Take no notice of the conspiricy theorists on this blog. You are right, when did you see a totally normal, honest firm slayed by the FSA? They may want some improvement to documentation sometimes, they may want to know what you sell, and to whoom. Fair enough.

A notice issued early provides fair warning. To say the total case must be approved by the RDC prior to publication, is nonsense and MiB knows it. I bet there were some connections between the firm who sold the products that got the attention of Enforcement and the firm they chased.

Chris F does not think the FCA should have the power to ruin someones life, but I do! I think the FCA should have every right to stamp down hard on those who target the gullable, the incompetant and the illogically greedy, to deprive them of their money. Ruin them! I would sieze all their assets, send them to jail for ten years and, when released, put them all on a small island off Scotland to rot. The island's name? Rockall!

@ Hickky

I do think the FCA should "have the power to ruin someone's life". I don't think they have the competence to do so. They should have been ruining a few banker's lives but they chose not to. That is the whole point.

There is a property company being regularly mentioned within these very pages which the FSA have been warned about - years ago. They have done nothing.

The FSA knew that Keydata was about to blow up, but they did nothing and could have.

The FSA knew about the systemic mis selling from UK banks, but chose not to take action. They knew about Libor fixing. They did nothing.

The only thing the FSA/FCA have proved thus far is that they are not competent.

This is the organisation which are about to be given the power to point the finger at the small guy and potentially ruin their business.

I can demonstrate that I take action when I find firms ripping off consumers. The problem is, the FSA don't.

Where is the accountability? Where are the controls?

I cannot make up my mind whether Hickky is just bored with not enough to do, an agent provocateur of limited skill, a devil's advocate of even less skill - or, god help him, that he actually believes what he writes!

@Alisdair

There's a bit of each of your hypothesis within my makeup. You are so perceptive for a Scotsman.

Have a good day.

Nah...with some people its dead easy

@Alisdair

I take issue with your perception of a lack of skill. Highly qualified, highly regarded, highly recommended and highly skilled combined with a high level of certainty of what I think is correct. So a typical financial adviser then.

So if you hold similar views about yourself , which I perceive you do, then I guess we are similar characters after all.

It's just a pity that you chose the law!

@ Hickky

Unlike you I do not hide behind a nom de plume.

So I really have no way of being able to assess for myself the attributes you ascribe to yourself. I can only judge you by what you say about the issues discussed on this and other blogs and the manner in which you say it.

I fervently hope that IFAs reading this blog and similar recognise your naive and simplistic "if you have nothing to hide you have nothing to fear" regulatory outlook for the Utopian and dangerous fallacy that my hard experience tells me that it is.

I am tired trying to persuade you to see that perhaps the regulatory world is not so black and white, or right and wrong, that your myopic vision would have others believe. Equally, I do not doubt for a second that there are IFAs out there, as there are lawyers, who are unfit to practice. I have acted for a number and, accept it or not as you wish, I advise them to throw in the towel.

Very often, it is not possible to ascertain either the fact of or degree of wrongdoing without investigation so it is right and proper that the FSA should investigate.

All I ask is that (a) you and others do not just assume that because the FSA has started an investigation that the IFA must automatically be guilty, and also (b) that such investigation be carried out professionally and honestly.

Believe me, or not as you wish, but the professional, honest and courteous FSA officers are a damned sight harder to deal with as they tend to be the ones who do know what they are doing.

I am accountable for the opinions I express here and, when called on them off line as I have been, I answer for them.

You? Well, anyone here can see that you don’t care to.

I would be affronted, frankly, if readers of these blogs equated my and your contributions to the discussions. I truly would.

@ Alasdair

You really shouldn’t get too vexated about the ramblings of Hang ‘em High Hiccup!

As you’ve observed, he really seems to believe what he writes which, as the days pass, become ever more hysterically tub thumping. The smatterings of Greek, or perhaps Latin...depending upon whatever he’s found on Google Translate to add a degree of faux education..... do not detract from what are essentially just the rabid ramblings of someone clearly detached from the rest of financial services.

I think you were probably correct when you referred to his moral eyrie the other day. As the ESS7ex boy gazes down malevolently from above, casting his beady eyes over the A13, I’m sure he has a clearview all the way to the City (maybe even to the French coast) and all he sees is everyone’s shortcomings...but none of his own.

I wonder what his clients would make of his fleck-mouthed vitriol if they were ever unfortunate enough to read the drivel he posts here. A disappointing example of the profession if ever there was one.

It is all the more disappointing that Hickky felt someone's place of birth or residence is relevant to this "discussion".

@ Chris F

Being a Scot is probably an advantage in life, any comment on Alisdair's place of birth or residence is only made in jest, and I think he knows it!

p.s. I learned Latin for 5 years at prep school, pity I cannot remember more. However Google Translate is a good tip, thank you!

I know this is a thread creep, but, when are they going to tackle the mortgage brokers who are introducing Pension busting cases and taking 40/60% of the pension fund are charges/fees ? these people are working outside regulation and do not care what harm they do.

@david

Good point! This is what the FCA should deal with as a priority.

I agree.

The BBC now seem to be taking more of a lead on this than the regulators!!