A definiton of profligate is “recklessly wasteful; wildly extravagant”.
I think that many ‘Mail on Sunday’ reading advisers will have been choking on their Sunday breakfast when they opened this weekend’s edition.
Well, wrapping neatly around the sports pages was a full colour, four page spread extolling the virtues of the FSCS. The features on “Savings” contained within made reference to various savings strategies and of course the protection the FSCS gives savers.
Now don’t get me wrong, the FSCS is a vitally important organisation and it has, does, should and will be there to protect investors who may be the victim of scams, miss-selling and financial collapse.
But, it is in fact the fund of last resort and it is funded, at vast cost, by the industry. It is not an educator, that seems to be the MAS role these days, and it should not be an advertiser recklessly spending money it often does not have in this way.
Funding of the FSCS is a hot industry (see our survey results) and political topic. It’s funding is seen by many if not all advisers as being highly unfair with calls for very large sums of money to top up empty ‘pots’ coming with very little notice, often with little or no explanation of it’s calculation methodologies and very little time to pay!
Failure to pay will see a firm placed in default and that in turn puts more of a burden on the FSCS.
This type of advertising campaign comes at a huge cost. So much of a ‘business win’ for the advertising agency was it that it has featured in a big way within Media Week where it was trumpeted: “The FSCS has partnered with Associated Newspapers and Absolute Radio as part of a 15-month campaign to build awareness of the financial protection it offers.
It went on to say:
Absolute Radio activity includes a six-part series, ‘Design For Life’, which will present a light-hearted look at important life events, such as holidays, the home, university and marriage……and feature Christian O’Connell, the host of Absolute Radio’s breakfast show and Ian Stone, presenter of Rock ‘N’ Roll Football, with well known comedians.
The report concluded ““This partnerships campaign aims to make more people aware of the protection we provide, by tapping into key areas of interest and highlighting where we can help build financial confidence amongst the British public.”
The FSA proposed last year to hike its annual costs by 15.6 per cent to £578.4m for 2012/13. View the FSA consultation paper on fees and levies for 2012/13 here.
This was on top of an FSCS levy of £33m for 2012/13 confirmed in its plan and budget.
To see the FSCS advertising in this way, foresaking last years crazy billboard initiative, follows in the “stupid spending” footsteps of the numerous Labour government advertising campaigns shouting loudly about all the benefits you should be claiming and how to go about it.
This is a further example, if one were needed, that regulation is a profligate growth industry, now spending your money on vanity projects of awareness creation.
In fact so bad is this example that “Part of the brief stated that the FSCS was looking for an agency that could engage audiences with a “low-interest subject matter”.
The FSCS should not trvialise what it does by spending your hard earned fees on engaging expensive media agencies, comedians and the likes of Ian Wright, Geoff Lloyd, Annabel Port of Absolute Radio’s ‘Hometime’ show, and Pete Donaldson, presenter of the ‘Sunday Night Music Club’ to promote “low interest subject matter”.
Building “financial confidence amongst the British public” is something we as an industry should aspire to deliver.
The FSCS should stick to spending it’s money, in fact your money, on doing what it says on the can and not being profligate.