Distribution Decline
Since regulation became an obsession amongst the trendy left, the distribution of financial products has collapsed.
Over zealous application of rules has stifled innovation and left the public poorly served.
The result: The burden on the state is increased and government is elevated above commerce as the means to provide financial security for the people.
This is SOCIALISM and a fundamental inversion of what should be happening in a free and democratic society.
There is only a very limited number of things government should do. These are: (1) Print money (they've had to do a lot of that lately because of our mistakes); (2) Create an army, navy, air force, etc. (national defence); (3) Make treaties and (4) Declare war - Tony did that with the Dodgy Dossier, remember? Talk about consumer detriment! .
Making the greater part of the population dependent on goverment for its welfare does not appear in the above list and we should not be enabling that dysfunction in our society.
Instead, government should be encouraging business, and in our case the financial services sector, to distribute products and services to those that need them. But here at the Financial Services Authority we are stifling that activity.
Poor no longer able to access advice
Now this really is a tragedy. Under our Third Glorious Five Year Plan, the Retail Distribution Review, the poor will no longer be able to access financial advice.
Remember all that hot air about the poor being excluded from financial services and our demands that banks provide bare bones bank accounts?
Well, it turns out it was hot air.
You see, the RDR is going to put financial services beyond the reach of the majority of working class and a good swathe of middle class people. They simply won't be able to afford the up-front fees we demand financial advisers charge their customers.
Advisers want to retain commission because it's an interest free short-term loan (typically over two years) from the investment house or life assurance company to the adviser, as the client's agent, to enable customers with more modest means to buy quite sophisticated products with the benefit and safeguard of regulated advice, thereby improving their lot. The loan is amortized very quickly. The benefit to the client (or the client's family in the case of a life assurance matter) is enormous.
People buy cars, washing machines and houses with appropriate loans. Why not financial services? What is so terribly wrong with that?
The principle has served the British public well for hundreds of years. But we're going to outlaw it. The big grubby finger of government is inserting itself into your adviser's businesses and robbing you of choice as to how you pay them.
Just like that!
Of course, rich people like us don't care. But there aren't enough rich people in the country to keep the present number of financial advisers busy. So there may be as many as 20,000 redundancies and lost livelihoods - just at the time when UK plc is teetering on the brink of recession.
And by the time tens of thousands of mature, experienced advisers have hung up their boots in light of this massive government interference in business it will be too late to reverse it.
Nice one!
Endowments
We've often taken advantage of the fact that some endowment policies have not performed as well as expected in order to put the boot into the financial services industry. We blame them for everything.
But did you know that our regulatory forebears in the form of the Life Assurance and Unit Trust Regulatory Organisation (LAUTRO) cast the die on the problem.
LAUTRO insisted that life assurance companies use projection figures that were too optimistic. Despite this, a good number of endowment policies actually worked extremely well. The problem lay mainly in the so-called 'low cost' endowment policy where policyholders were encouraged by life assurance companies (enabled by LAUTRO's figures) to invest only a fraction of the required amount to achieve a good outcome.
Now we're compounding the damage. When a policyholder receives a letter indicating a likely shortfall, we insist that the life assurance company quote ridiculously high growth projection figures. As these policies are typically producing less than 1% per annum bonus rate (because of low interest rates due to the banking crisis which we allowed to happen), why do we insist that life assurance companies provide such misleading information to the public?
Nobody here knows or cares. We see this as a very low priority. Our role is to do important things like protect the public.
Sorry.
Sod the 99%, what about the 55%?
The Occupy nutters should be camped outside our door because we were one of the key players in the banking crisis.
But the 99% are suffering a 55% tax hit on their pensions when they transfer them from spouse to spouse. Fifty five percent! You see, the reason why we are so hot on the amounts clients are charged by the City is because by keeping the charges low there is more money to be taxed at 55% when someone dies.
Fifty five percent is an obscene amount of tax to pay just to pass the money from Mr. to Mrs., especially at the time of bereavement. But we don't see it that way. Well, to be honest, we don't see it at all. You see, our job is to protect the public.
Sorry.
Cold War
If you're a pensioner huddled around a one bar electric fire, afraid to heat your house properly this winter because interest on your savings has collapsed, you should consider this:
It was our negligence that allowed the banking crisis to happen. It was our dilatory regulation of our friends at the banks.
By our actions, we've brought misery and poverty to millions.
But still we draw our nice fat £800,000 salaries and bonuses as if nothing had ever happened.
In any other line of business we would've been fired: Sent into orbit on the toe of the General Manager's right foot. But here at the FSA we just shrug it off. We say that it wasn't our fault. But if it wasn't our fault whose bloody fault was it?
Lord (of what?) Turner said it wasn't our fault so that settles it. We had absolutely nothing to do with it. Not our fault. Nor our fault. Not our fault. We're getting sick of saying that. Can't you leave us alone now?
But don't worry, Spring is just around the corner.
Why have you got that tea towel wrapped around your head? Anyone would think it was freezing in here.
Have a nice cup of tea. There's better!
Myriad Others
Need we go on about our manifold failures?
Do you get the point? We are just as likely to deliver the classic cock-up as anybody but we've become pompous, pious and too stiff-necked to be of any use. We are always right and will not listen to any advice from anyone. Perhaps that's our greatest failing. Because when anyone or any institution becomes unteachable the outcome is easy to predict. Nobody will be covered in glory.
We have become the most corrupt of organisations: For whilst we speak of 'fairness' for the public, we actually work for political ends to the destruction of the financial services infrastructure and for our own enrichment. In this we are guilty of deception on the grandest scale. And if magnitude can give any measure of the opprobrium with which our misdemeanors will be viewed by the public, then our punishment will be severe indeed.
For we are quietly destroying the financial landscape of Great Britain whilst drinking deeply from the cup of ill-gotten gains in the form of regulatory fees and fines for which we have done very little and, indeed, we are applying to the destruction of the businesses that pay them.
The situation is dire.
You should write to your MP and especially members of the Treasury Select Comittee to ask them to intervene before it's too late. Our leadership should be replaced by those more capable and less susceptible to political motivation.
Time, quite literally, is of the essence.
Guidance Notes
No. 1. Every socialist government ends in financial disaster.
No. 2. Every socialist policy damages the people it claims to protect.
No. 3. Socialists tell us what they are doing by accusing us of doing it.
No. 4. Socialists are socialists first, before anything else.
No. 5. To learn the motive of any policymaker, FOLLOW THE MONEY.
Once these principles are grasped, a true understanding of what socialists have planned for you, your loved ones and your money can be fully appreciated.
