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Industry demands clarity on 'unacceptable' FSCS bills

by Annabelle Williams on Dec 07, 2012 at 08:13

He also took issue with the exemption of fund income from tariff data, arguing there is still a risk.

‘Do I agree that there isn’t a risk from firms that have exempted income? I do think there’s a risk and where there is a risk they should pay.’

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2 comments so far. Why not have your say?


Dec 07, 2012 at 09:33

Although there's a degree of sympathy regarding the level of FSCS that stockbrokers are being asked to pay as well as the lack of credible relevance to the PCIAM's regarding some of the claims/disasters in my view there's also a degree of hypocrisy in all of this. Let's not forget that these very same pro-RDR pro-FSCS firms have benefited enormously from the consolidation that has taken place since the mid-90s largely due to fascist principles care of our super regulator. It's quite clear that many have cosied up to FSA CISI APCIMS & others with vested interests in this uneven playing field. With the pro-RDR firms converting themselves to a universal fee paying model that investors are effectively over-paying for the only real losers will be shareholders whose payouts may get effected, the clients and as no-one dares to mention the bonus pools. Taking away personal liability has allowed many to take their eyes off the ball. The real blame should be applied to those who are paid to protect these firms internally from regulatory changes as well as to protect the very clients of these firms. The industry seems to have forgotten the main reason why we're all here which is a major failure in itself. I don't recollect the old mostly dead Partners from the 50 or so failed firms from the early 1970's complaining when the old slush fund simply ran dry. All this current alarm smells of incompetence and greed to me.

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Dec 07, 2012 at 11:42

You're right. There's nothing quite like unlimited liability to concentrate the mind. But this is only part of the issue.

To me the nub is that with statute-based regulation, the industry has no powers of sanction over the transgressors. Liabilities, yes, but sanction, no. Statutory regulation has taken away the power of the industry to poilce itself.

On the other hand, the body with the powers of sanction has no liabilities. Regulators in general can be utterly incompetent and yet remain free from all liabilities. It is impossible to sue the FSCS or the FSA, I understand.

You are right to slam the cosy-up'ers, but do remember that they are merely reacting in a typically huuman way to the changes since 1987 by exploiting the opportunities that this horlicks has thrown up. The fact that this new 'industry' contributes nothing of value after consuming 10% of the turnover of the private client industry is monstrous.

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