Letter Published in FT Adviser 1 April 2010
Your back page article (FA, 18 March, FSA Goes on Attack Against Wrongdoers) left me with an overwhelming feeling of sadness and disappointment.
It seems that in future Mr Sants, chief executive of the FSA, wants us to all operate within a culture of fear. I am not sure who will benefit from such an approach but it certainly will not be the customer.
The City regulator has sufficient authority and powers to take ample action against wrongdoers, who will not change their activity simply as a result of this new approach. What is more likely to be the case, is that good professional IFAs will be less likely to explore creative solutions for their customers and will steer clear of legitimate but perhaps higher risk solutions, for “fear” of falling foul of the regulator, even if those solutions are in the best interests of the customer.
All fear regimes also create suspicion and mistrust and I feel such an approach will erode trust in the FSA. It will actually bring about completely the reverse outcome to that desired by Mr Sants. I would be the first to admit that mistakes can be made and things can always be learnt, but with over 80 per cent of my customers giving me a 100 per cent satisfaction rating, I do not feel I should have anything to fear. The natural outcome is that well intentioned IFAs are much less likely to take advantage of FSA workshops and surgeries, approach the regulator for help and advice or expose wrongdoing for “fear” of inadvertently putting themselves in the spotlight.
While we all undoubtedly support the FSA’s aspirations their execution is, in my view, as misguided as the advice they are tying to stop.