Gizza job, I can do that.

The New Year is traditionally a time when many people reassess their professional roles and decide a change may be worth pursuing. For many people I suspect this involves looking for a new job – indeed recent research published by the Institute of Leadership and Management (ILM) revealed that 37% of workers say they are planning to leave their current jobs in 2015, a significant increase on the 19% who answered the same way in 2014 and the 13% in 2013.

But what about the financial advisory profession? How many advisers reading this article are considering a career change? I suspect very few although, given the average age of advisers, I wonder if most aren’t looking forward to retirement with some considerable relish. To be honest, I can’t blame those advisers who might be looking for an early exit – this job comes with some significant pressures to deal with whether they are in the form of regulation, increased costs, political interference, constant change, professional development requirements. The list goes on.

Unfortunately having to cope with these ongoing developments and the growing requirements placed on advisers has – in this country at least – somewhat detracted from the attractiveness of financial advising as a career choice. I am always interested in the ‘job reaction’ you get from people when you tell them what you do. How are financial advisers perceived? Are they thrown in the same pot as estate agents or journalists or parking wardens? I hope not given the job advisers do and the focus on quality and service.

Then again, the nature of what a financial adviser is and does has been systematically depowered by the continuous regulatory changes and developments. It is about to become even more confusing for consumers in April when a whole host of pension ‘Guidance agents’ are unleashed on the at-retirement market with only a requirement to have “some pensions knowledge” as the recent Citizens Advice job specification put it.

Of course it doesn’t have to be this way. Last year research conducted in the US by Rapacon placed being a financial adviser as one of the top ten jobs to have in the future. It is clearly a sought after career choice suggesting to me that the profession’s reputation across the pond is not just intact but strong and enticing to those looking at their employment. Can we really say the same in the UK?

So, how can we improve the reputation of the profession, ensure it is attractive to new blood, and develop greater consumer understanding of what advisers do, their value and worth, and why it’s a job worth having? Like most things, I believe it’s important to start with yourself. To that end, it’s about being the best you can be in your individual role which does mean self-improvement, lifelong learning, a commitment to continuous professional development, etc. If advisers are focused on self-betterment, on improving themselves and increasing their own standards, then this will clearly feed into the service they offer which will improve reputations and generate strong feedback and referrals.

Advisers need to be fully focused on their own roles which means not getting into a rut and instead retaining interest in the job and everything about it. Learning more and securing greater knowledge is a fundamental way to do this – we have recognised this for some time which is why we established a CPD library containing both structured and unstructured material which is easily accessible and allows the adviser to continually load up on new information. It will not only help the adviser improve their service offering but feed through into a growing positive reputation for the profession.

A profession renowned for its security, its prospects and the quality of its overall offering will clearly be attractive to those who are working in other areas or have yet to start work. While the legal, accountancy, and banking sectors have been tapping into the graduate market for decades, establishing these careers as worth pursuing, unfortunately the advisory community has not been working at the same level.

If we do want to bring new blood into our community then we certainly need to begin pushing and marketing the profession in a much more focused and structured way. Our professional and trade bodies must work closely together on developing an ongoing campaign that supports individual firms’ own recruitment policies if we are to raise the profile of being a financial adviser and make it stand out from the crowd. This should be a long-term commitment that highlights the positives of the profession and sets out the very tangible and compelling reasons for being part of it.

With the New Year being a time when many people consider what they should be doing next now is certainly the right point to secure our own professions’ future.

 


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Panacea petition for financial advisers and paraplanners FCA fines skim. You can only milk a cow so long before you’re left holding the pail.

I had the good fortune to meet former US President Ronald Reagan a good few years ago while walking along the beach in Santa Monica. Although in his declining years he cut an impressive figure and gave me a very snappy salute and a smile.

In his prime he had an interesting take on Governments and taxation, saying “a Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it”.

The increasing cost of regulation on firms is significant and for firms who have consistently kept a ‘clean sheet’ there is a feeling that this is not being rewarded quite as it should be.

In what form that reward should be had previously been understood to see fines levied for bad practice and behaviour used to reduce the regulatory cost on firms who had ‘done the right thing’ with their customers.

But that is no longer the case.

Indeed it appears quite surprising that many so in the industry (if my recent conversations are to be a guide) are oblivious to the fact that those whopping fines (some £1,461,875,800 in the year to mid December 2014) are not being used to reduce costs in a way that may, indeed should be expected.

We felt that a degree of clarity was now required as the fines were, it seems, just going straight to the Treasury, without passing ‘Go’. A craftiliy legislated ‘skim’ of gargantuan proportions

What seems even more bizarre is that the vast fines levied by the FCA are against, in many cases, banks bailed out by the taxpayer on the actions of the Government.

Yep, you are right. The taxpayer ‘owned’ banks are fined for bad behaviour, therefore, these fines are in effect paid by the taxpayer and not the offending individuals.

In levying these fines the Treasury and the FCA are simply engaging in a breathtaking form of state sponsored and legislated money laundering.

It goes like this.

  • Banks bailed out by the government of the day
  • Bad behaviour of epidemic proportion discovered and/or declared
  • Regulator investigates in a manner that would do General Melchett proud
  • Guilty verdict delivered
  • Sentence predetermined and fines calculated
  • Fines paid to the FCA by the very banks that have been bailed out by the taxpayer.
  • Money returned by FCA to the Treasury, who it could be argued has paid the fine by way of earlier taxpayer bailout.
  • And it’s tea and cakes at the Ritz before you know it.

This is madness. If the banks, especially state supported banks, are such villains keep them out of the FCA’s jurisdiction and budget, quarantine them in the Treasury or Bank of England until they are safe to come out, disease free.

I wrote to the FCA with a ‘Freedom of Information’ request in November, it read as follows:

“The total amount of FCA imposed fines levied so far in 2014, according to the FCA website today stands at £1,471,431,800. There was an understanding, possibly even a requirement in the industry, that fines would be used to reduce the regulatory cost burden on firms. In fact rewarding good practice at the expense of bad. It now appears that this is no longer the case. I would be grateful if you could confirm the following:

 How much of the above figure has been paid away to the Treasury in 2014 for so called ‘good causes’ use? 

On what or whose authority was this ‘pay-away’ made possible

When was that decided?

Was the original intention of cost reduction made clear to the Treasury before the decision to ‘pay-away’? 

Was any attempt made to persuade the Treasury that fines should really be used to offset the regulatory cost burden on firms? 

What was the budgeted cost of regulation to date in 2014? 

What is the actual cost so far for regulation in 2014?”

The reply, now received reads as follows:

Freedom of Information : Right to know request

Thank you for your request under the Freedom of Information Act 2000 (the Act), for information about FCA fine levies and HM Treasury (HMT).  The full request is shown in the attached Annex. 

Your request has now been considered and we hold the information which falls within the scope of your request. I have numbered your request for ease of reference and will answer each point in turn.

1               How much of the above figure has been paid away to the Treasury in 2014 for so called ‘good causes’ use? 

To date, we have received, £1,461,875,800 rounded to the nearest 100, (99.4% of £1,471,431,800 of the fines issued in the calendar year 2014).  The net figure paid to HMT of £1.37bn (as at 10/12/2014) reflects payments made in 2014 to date (iro 2014 fines only)     less 2014/15 budgeted Enforcement costs   which we retain and give back to fee payers.  We have no knowledge of what HMT do with these funds, as once they are paid over it is up to HMT how they use the money.

          The penalty receipts paid over to HMT are as per paragraph 20(6) of Schedule 1ZA Financial Services and Markets Act 2000 (“FSMA”), attached. 

2               On what or whose authority was this ‘pay-away’ made possible.

This was a decision by Parliament, Statutory Instrument 2013 no.418 – Financial Services and Markets – The Payment to Treasury of Penalties (Enforcement Costs) Order 2013.

3               When was that decided?

The above-mentioned Statutory Instrument was laid before Parliament on 27th February 2013 and came into force on 1 April 2013. 

4               Was the original intention of cost reduction made clear to the Treasury before the

          decision to ‘pay-away’?  

          HMT was fully aware of the arrangements in place to return penalty receipts back to the industry prior to introducing Statutory Instrument 2013 No.418.

 

5               Was any attempt made to persuade the Treasury that fines should really be used to offset the regulatory cost burden on firms? 

The predecessor body, the FSA, did discuss the impact of this new arrangement on firms with HMT and successfully made the case that penalty receipts paid over to HMT should at least be net of our Enforcement costs.  As a consequence, the regulatory cost of Enforcement activity is not borne by the industry.  This is evidenced by firms continuing to receive a “deduction” on their FCA annual fees.      

6               What was the budgeted cost of regulation to date in 2014?  

The FCA’s Ongoing Regulatory Activity (ORA) budget in 2014/15 is £452m as per our published business plan for 2014/15.The budgeted cost of regulation from April to 30 October is £264m. 

7               What is the actual cost so far for regulation in 2014?

          The actual FCA ORA expenditure from 1 April 2014 to 30 October 2014 is £264m, in line with budget.

If you have any queries then please contact me.

So, regulated firms are paying £264m in fees to the regulator to cover the FCA budget, in addition they are paying levies to the FSCS for the 2014/15 budget of £313m,for 2015/16 it will be set at £287m.

The levy can cause considerable distress to small advisory businesses as the sums are often large, unpredictable in amount, timing and require immediate payment.

While all this is going on, £1.37bn in fines is being ‘skimmed off’ to the Treasury and being used, assuming we actually believe the Government spin, for ‘good causes various’ like sending the Tower of London Poppies on a UK tour. Having seen the display last week, packed and ready at the Tower, I think some change may be left over.

To quote another former US President (George Washington) “It is better to offer no excuse than a bad one.” This is unfair, immoral and must stop.

The biggest obstacle to consumers getting easy access to independent financial advice is cost.

The biggest cost to financial services firms after salaries are for regulation.

Surely it does not take too much cerebral activity to calculate that with the FCA costs of £264m plus the FSCS budget of £313m, fines exceed regulatory costs by £894,431,800.

This chould mean that offsetting fines against the cost of regulation and compensation levies could have given the industry ‘good guys’ a ‘free ride’ for over 2 years and those hard pressed ‘consumers’ or give “low end savers” as Mark Garnier MP calls them, access to financial advice at a very much reduced cost as they can benefit too from the reduction in the regulatory cost burden.

Dare I suggest that these fines could have even funded the FSCS based upon the current budget for at least 4 years, again reducing costs for consumers?

That would be a very moral, even sensible use of such large fines would it not Mr. Osborne?

The Treasury is treating the financial services industry as a ‘milking cow’. The cost of demonstrably reprehensible bad behaviour, mostly by banks, should benefit the good guys ultimately reaching their clients, the great British consumer.

Henry Ford famously said, “it is not the employer who pays the wages, they only handle the money. It is the customers who pays the wages”.

And in the world of financial services it is ultimately the consumer who pays the bill for increasing fees by increased advice and product charges.

With politicians thoughts turning to the May 2015 General Election there are some questions that should be asked by those who own and operate regulated financial services businesses should they get door-stepped in the coming months.

The first action should be: “why are you using my industry fines to support Treasury spendin instead of reducing my fees”? 

The second should be to support my Downing Street petition asking that: 

Parliament should reverse SI 2013 No218 allowing consumers to benefit instead by way of lower product charges and access to lower cost independent financial advice as a result of fines for bad behaviour reducing regulatory costs on MY firm.

FCA fines skim. You can only milk a cow so long before you’re left holding the pail.

I had the good fortune to meet former US President Ronald Reagan a good few years ago while walking along the beach in Santa Monica. Although in his declining years he cut an impressive figure and gave me a very snappy salute and a smile.

In his prime he had an interesting take on Governments and taxation, saying “a Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it”.

The increasing cost of regulation on firms is significant and for firms who have consistently kept a ‘clean sheet’ there is a feeling that this is not being rewarded quite as it should be.

In what form that reward should be had previously been understood to see fines levied for bad practice and behaviour used to reduce the regulatory cost on firms who had ‘done the right thing’ with their customers.

But that is no longer the case.

Indeed it appears quite surprising that many so in the industry (if my recent conversations are to be a guide) are oblivious to the fact that those whopping fines (some £1,461,875,800 in the year to mid December 2014) are not being used to reduce costs in a way that may, indeed should be expected.

We felt that a degree of clarity was now required as the fines were, it seems, just going straight to the Treasury, without passing ‘Go’. A craftiliy legislated ‘skim’ of gargantuan proportions

What seems even more bizarre is that the vast fines levied by the FCA are against, in many cases, banks bailed out by the taxpayer on the actions of the Government.

Yep, you are right. The taxpayer ‘owned’ banks are fined for bad behaviour, therefore, these fines are in effect paid by the taxpayer and not the offending individuals.

In levying these fines the Treasury and the FCA are simply engaging in a breathtaking form of state sponsored and legislated money laundering.

It goes like this.

  • Banks bailed out by the government of the day
  • Bad behaviour of epidemic proportion discovered and/or declared
  • Regulator investigates in a manner that would do General Melchett proud
  • Guilty verdict delivered
  • Sentence predetermined and fines calculated
  • Fines paid to the FCA by the very banks that have been bailed out by the taxpayer.
  • Money returned by FCA to the Treasury, who it could be argued has paid the fine by way of earlier taxpayer bailout.
  • And it’s tea and cakes at the Ritz before you know it.

This is madness. If the banks, especially state supported banks, are such villains keep them out of the FCA’s jurisdiction and budget, quarantine them in the Treasury or Bank of England until they are safe to come out, disease free.

I wrote to the FCA with a ‘Freedom of Information’ request in November, it read as follows:

“The total amount of FCA imposed fines levied so far in 2014, according to the FCA website today stands at £1,471,431,800. There was an understanding, possibly even a requirement in the industry, that fines would be used to reduce the regulatory cost burden on firms. In fact rewarding good practice at the expense of bad. It now appears that this is no longer the case. I would be grateful if you could confirm the following:

 How much of the above figure has been paid away to the Treasury in 2014 for so called ‘good causes’ use? 

On what or whose authority was this ‘pay-away’ made possible

When was that decided?

Was the original intention of cost reduction made clear to the Treasury before the decision to ‘pay-away’? 

Was any attempt made to persuade the Treasury that fines should really be used to offset the regulatory cost burden on firms? 

What was the budgeted cost of regulation to date in 2014? 

What is the actual cost so far for regulation in 2014?”

The reply, now received reads as follows:

Freedom of Information : Right to know request

Thank you for your request under the Freedom of Information Act 2000 (the Act), for information about FCA fine levies and HM Treasury (HMT).  The full request is shown in the attached Annex. 

Your request has now been considered and we hold the information which falls within the scope of your request. I have numbered your request for ease of reference and will answer each point in turn.

1               How much of the above figure has been paid away to the Treasury in 2014 for so called ‘good causes’ use? 

To date, we have received, £1,461,875,800 rounded to the nearest 100, (99.4% of £1,471,431,800 of the fines issued in the calendar year 2014).  The net figure paid to HMT of £1.37bn (as at 10/12/2014) reflects payments made in 2014 to date (iro 2014 fines only)     less 2014/15 budgeted Enforcement costs   which we retain and give back to fee payers.  We have no knowledge of what HMT do with these funds, as once they are paid over it is up to HMT how they use the money.

          The penalty receipts paid over to HMT are as per paragraph 20(6) of Schedule 1ZA Financial Services and Markets Act 2000 (“FSMA”), attached. 

2               On what or whose authority was this ‘pay-away’ made possible.

This was a decision by Parliament, Statutory Instrument 2013 no.418 – Financial Services and Markets – The Payment to Treasury of Penalties (Enforcement Costs) Order 2013.

3               When was that decided?

The above-mentioned Statutory Instrument was laid before Parliament on 27th February 2013 and came into force on 1 April 2013. 

4               Was the original intention of cost reduction made clear to the Treasury before the

          decision to ‘pay-away’?  

          HMT was fully aware of the arrangements in place to return penalty receipts back to the industry prior to introducing Statutory Instrument 2013 No.418.

 

5               Was any attempt made to persuade the Treasury that fines should really be used to offset the regulatory cost burden on firms? 

The predecessor body, the FSA, did discuss the impact of this new arrangement on firms with HMT and successfully made the case that penalty receipts paid over to HMT should at least be net of our Enforcement costs.  As a consequence, the regulatory cost of Enforcement activity is not borne by the industry.  This is evidenced by firms continuing to receive a “deduction” on their FCA annual fees.      

6               What was the budgeted cost of regulation to date in 2014?  

The FCA’s Ongoing Regulatory Activity (ORA) budget in 2014/15 is £452m as per our published business plan for 2014/15.The budgeted cost of regulation from April to 30 October is £264m. 

7               What is the actual cost so far for regulation in 2014?

          The actual FCA ORA expenditure from 1 April 2014 to 30 October 2014 is £264m, in line with budget.

If you have any queries then please contact me.

So, regulated firms are paying £264m in fees to the regulator to cover the FCA budget, in addition they are paying levies to the FSCS for the 2014/15 budget of £313m,for 2015/16 it will be set at £287m.

The levy can cause considerable distress to small advisory businesses as the sums are often large, unpredictable in amount, timing and require immediate payment.

While all this is going on, £1.37bn in fines is being ‘skimmed off’ to the Treasury and being used, assuming we actually believe the Government spin, for ‘good causes various’ like sending the Tower of London Poppies on a UK tour. Having seen the display last week, packed and ready at the Tower, I think some change may be left over.

To quote another former US President (George Washington) “It is better to offer no excuse than a bad one.” This is unfair, immoral and must stop.

The biggest obstacle to consumers getting easy access to independent financial advice is cost.

The biggest cost to financial services firms after salaries are for regulation.

Surely it does not take too much cerebral activity to calculate that with the FCA costs of £264m plus the FSCS budget of £313m, fines exceed regulatory costs by £894,431,800.

This chould mean that offsetting fines against the cost of regulation and compensation levies could have given the industry ‘good guys’ a ‘free ride’ for over 2 years and those hard pressed ‘consumers’ or give “low end savers” as Mark Garnier MP calls them, access to financial advice at a very much reduced cost as they can benefit too from the reduction in the regulatory cost burden.

Dare I suggest that these fines could have even funded the FSCS based upon the current budget for at least 4 years, again reducing costs for consumers?

That would be a very moral, even sensible use of such large fines would it not Mr. Osborne?

The Treasury is treating the financial services industry as a ‘milking cow’. The cost of demonstrably reprehensible bad behaviour, mostly by banks, should benefit the good guys ultimately reaching their clients, the great British consumer.

Henry Ford famously said, “it is not the employer who pays the wages, they only handle the money. It is the customers who pays the wages”.

And in the world of financial services it is ultimately the consumer who pays the bill for increasing fees by increased advice and product charges.

With politicians thoughts turning to the May 2015 General Election there are some questions that should be asked by those who own and operate regulated financial services businesses should they get door-stepped in the coming months.

The first action should be: “why are you using my industry fines to support Treasury spendin instead of reducing my fees”? 

The second should be to support my Downing Street petition asking that: 

Parliament should reverse SI 2013 No218 allowing consumers to benefit instead by way of lower product charges and access to lower cost independent financial advice as a result of fines for bad behaviour reducing regulatory costs on MY firm.

Esther Dijkstra on Scottish Widows protection and improving customer engagement

Scottish Widows must be one of the most iconic brands in UK financial services.

And after almost a ten-year absence they are about to launch back into the adviser protection space.

My guest today is heading up that relaunch. Whilst she isn’t going to tell you all the secrets of the new proposition she does drop some tantalising hints.

Esther is passionate about customer engagement and share her views on what we as an industry need to do to improve that engagement.

Hear Esther talk about the importance of using emotions rather than statistics to empathise with customers.

Listen how looking at completely different propositions, in this case Spotify, can give you a different perspective on customer engagement.

Listen now

Clive Adamson’s FCA departure is costing how much?

As they say, it is always the cover up that causes the problem.

Bob Woodward, one of the now very famous journalists that uncovered what was going on in the great political Watergate/ Nixon scandalof 1972 said “The fact of the Watergate cover-up is not nearly as interesting as the step into making the cover-up. And when you understand the step…….?”

Clive Adamson, the FCA’s director of supervision, told the TSC last December that he had previously considered resigning before the end of his term of office in 2016, but says he decided that “I didn’t want to become part of the story,” and so resigned days before the FCA report into the March 2014 events that led to £6bn being wiped off the stock market value of insurance companies was published. This was the ‘outcome’ (yes that word again) of him being quoted as saying that the FCA was planning to review some 30m policies going back decades and was considering scrapping policy exit fees.

Whilst the resignation reasons were clear, some may say very honourable, what is not so clear is at what cost to the regulator and in turn the industry who has to pay for the regulators activities and pay off’s?

Given that any pay-off from public office these days is coming under severe scrutiny from both the public and politicians (the next parliament could see legislation to cap what is currently seen as excessive public sector pay offs for failure based resignations and redundancies) we thought this could be a smoke and mirror exercise in damage limitation by way of money changing hands.

An exercise designed to ensure that the individuals go with as little fuss as possible is bound to have some element of a ‘sweetheart deal’ about it.

Resignations of a senior nature at the FSA, now the FCA always mean large sums of money being paid to those departing heads. In light of ‘form’ in this area we felt that a Freedom of Information Act 2000 request for the following information would be in order to find out what these latest departures will cost the industry for failures in office:

I read that “FCA director of supervision Clive Adamson and director of communications Zitah McMillan are to leave the regulator as part of a restructure” and that “The FCA says Adamson and McMillan’s departures are not related to its closed book review”.

 I would be grateful if you could confirm what lump sum redundancy/ severance payments were/ are to be made to the above individuals, if any, stating how much and any special terms attaching?”

After some four weeks we got a January reply, it reads:

Your request has now been considered and I confirm that we hold information regarding the basis upon which Clive Adamson and Zitah McMillan will be leaving the FCA. However, we are not able to disclose this information to you as it constitutes their personal data and to do so would breach the Principles of the Data Protection Act 1998 (DPA). Therefore, we consider that section 40 (Personal Information) of the Freedom of InformationAct applies. For a more detailed explanation as to why this exemption applies please refer to annex A, attached.

However, you may be interested to know that Clive Adamson’s remuneration details (along with all other FCA Board Members details) will be published in the FCA’s Annual Report for 2014/15; we expect this to be published on our website by the end of July 2015. We are therefore not obliged to provide you with the remuneration details now because section 22 (Information Intended for Future Publication) of the Act applies.  For a more detailed explanation as to why this exemption applies please also refer to annex A, attached.

If you have any questions or queries please let me know.

To the extent that the information that we hold contains personal data about an individual, section 40(2)(b) of the Act provides that “Any information to which a request for information relates is also exempt information if … either the first or second condition below (see sections 40(3) and 40(4) of the Act) is satisfied”. 

We have applied this exemption because the first condition (as stated in section 40(3) of the Act) is satisfied as the information requested comprises the personal data of individuals other than yourself, which if disclosed would breach the Principles in the DPA.  It would be a breach of Principle 1 to disclose such information, as it would not be fair to the individuals concerned.  As is usual in such cases, in the public as well as the private sector, the basis on which Mr Adamson and Ms McMillan will be leaving the FCA has been incorporated into a legal agreement, which contains mutual confidentiality obligations.  The individuals’  reasonable expectation is that their personal information will be protected and to breach this expectation would not be ‘fair’ (as noted in the first principle).  The individuals concerned have not given their consent for this personal data to be made public and the release of such information may be detrimental or distressing to the individuals themselves.

 Section 22 (Information Intended for Future Publication)

Section 22 of the Act provides that information is exempt if it is held with a view to its future publication at some future date.  Section 22 is a qualified exemption and is subject to the public interest test.  As such we have considered the factors for and against disclosure as follows.

For disclosure

Disclosure would increase public awareness of the FCA’s processes around senior staff departure.

Against disclosure

We do not consider it to be in the public interest to release this information in advance of publication, considering it is due to be published in the future together with other information about Board members’ remuneration and the FCA’s income and expenditure generally. Disclosure of financial information about Mr Adamson at that time will allow the information to be seen in context, which would not happen if there was separate, early publication.

Overall, we consider that the public interest lies against disclosure for the reasons above, and we do not consider it to be in the public interest to release the information in advance of the anticipated date.

I get a little concerned with some of the highlighted Data Protection Act observations and justifications as these invariably are devices to deflect attention, condemnation and possibly outrage.

In this case it seems especially strange that the individuals have refused to give consent at this stage for something that will eventually come out in the wash, being disclosed (in what detail we do not yet know) in the summer, and just after a General Election too.

In the very best Private Eye tradition, “shurely we should be told”?

What do the FOS, schools and NHS have in common?

Well, if recent reports and our survey results last year are to believed the common ground is that people lie to gain advantages that are not theirs to have.

This is a damning indictment of UKplc today. It demonstrates very clearly that if you do not qualify for something that is not by right yours, a simple little ‘white lie’ will see (that brilliant regu-phrase) a ‘positive’ outcome.

What is a positive outcome for one is a detrimental outcome for others.

The NHS has highlighted the fact that valuable resource could be saved if free prescription entitlements were more closely monitored. The somewhat archaic process of checking a box with a pen on a prescription form followed by a squiggle will result in £237m of free medication for so many beggars belief.

The NHS has form in this area. That is why so many overseas health tourists have taken the UKplc for a ride over the years. Foreign visitors and short-term migrants cost the NHS £2billion a year, an official report warned in 2013 and only around 16 per cent of the money was clawed back.

UKplc is it would seem, far too polite to question entitlements to state benefits. NHS frontline workers and pharmacists are not wishing to be involved in a few simple checks to determine entitlement because they do not see it as their responsibility.

Top state schools are having a problem too. It would seem that their popularity has seen potential student’s parents claiming postcode residency rights that they simply do not have, just to get little ‘Wayne or Waynetta’ into the school of their choice. The result is that hundreds of children have been banned from the state schools of their choice because their parents simply cheated the system to win them a place.

This is not fair on those who do have the postcode good fortune and I am pleased that at last some parents are paying the price for lying.

Now this brings me nicely on to the FOS.

Our 2011 and 2014 surveys found that adviser firms had experienced very high levels of fraudulent attempts at getting compensation. A particularly disturbing trend was the increase to the already large 2011 percentage (64%) of firms who had experienced false or manufactured accusations from complainants in an attempt to gain compensation? In 2014 it stands at 74%. The ambulance chasing section of the legal profession has not helped this situation.

If trust is to be restored in the financial services industry professional practices and moral standards, this should be matched by an injection of cynicism by the FOS.

A firm should not be treated as an “Operation Yew Tree’ suspect by the FOS where the complainant is seen to automatically be believed. Maybe that is why they need so much more office space.

We note that in November, both Mark Garnier MP and Caroline Wayman, the new FOS boss made reference to our survey in a Treasury Select Committee meeting. With 2015 well and truly here, perhaps Ms Wayman could start to act on some of our findings before even more damage is done to the industry with compensation being paid and reputations damaged when they simply should not have been.

Investigations should be based on facts not he said/ she said fishing expeditions.

And that brings me back to the NHS.

It will take until 2018 for a computer system to be available to dispensing chemists to do the appropriate checks on free prescription eligibility. In the meantime what is wrong with these outlets and indeed hospitals doing a few simple checks themselves?

This is common practice in many European countries. In Spain for example, you can forget about free treatment unless you carry an NHS card.

More requests for proof are made at a supermarket checkout to buy a bottle of wine than are asked at a chemist to fulfill a prescription order.

More time is spent on ensuring you can only buy one pack of ‘paracetomol’ so that you do not overdose yourself than on checking if someone is entitled to sometimes thousands of pounds worth of free drugs.

For financial advisers, the money laundering checks for a small ISA investment are more rigorous than check made by the NHS who are about to deliver thousands of pounds of free treatment to somebody not entitled to it.

Madness, and it’s only January.

Setting the record straight with Phil Loney, Group CEO Royal London

With aspirations of becoming “the Waitrose or John Lewis of the insurance sector”, Royal London group chief executive Phil Loney has certainly had his hands full in the three years since taking the helm of the mutual, which boasts a heritage that dates back as far as the 1860s.

Royal London is mid-way through a rebranding exercise that will see it evolve from overarching seven trading names working on its behalf, to the core and single brand standing firm today.

That’s quite a challenge for any CEO, so for Loney, supported by ‘Man from the Pru’ advertising mastermind Clare Sheikh, how did he find the process of streamlining the brands to collectively signify great quality with value for money – his “strategy of differentiation”?

“We aspire to be the company that is providing the best outcomes and best experiences for consumers, which we believe is rooted in our mutuality,” Loney explains.

“We found all our brands were relatively well-known amongst the insurance industry and reasonably well-known by intermediaries but really poorly known – as was Royal London – amongst consumers.”

Practically, rebuilding seven disparate brands was neither on strategy nor affordable, so Loney set about explaining to the people working at Royal London, RL360°, Bright Grey, Scottish Provident, Scottish Life, Ascentric and IFDL (the acquired Royal Liver and Co-operative divisions had already been absorbed into the Royal London brand) their top-level strategy and approach with the need for internal buy-in a major priority.

“You hope to arrive at a tipping point, where enough people like what you are doing,” he adds.

Under the guidance of Sheikh, the business set about designing what the new brand would incorporate, following comprehensive research with consumers, intermediaries, and staff members.

Part of the process was the inception of an internal communications initiative of having “pelican pods” – small teams of people from all facets of the business working together to develop and articulate the brand values and culture, in consultation with their wider colleagues.

The naming was the easiest part, he said, with Royal London being the actual mutual, the life fund, the umbrella company. As luck would have it, it was also the name best received in focus groups, with “Royal” speaking of quality and “London” suggesting credibility in financial services.

In day-to-day terms, the business had already begun its transition to shared operating platforms across the group, refreshing their technology and deciding on the target architecture to be used for, say, its pensions or protection business.

After the initial internal resistance, which was ultimately about managing emotional responses from the most logical of minds, forced to wrap their heads around being part of a bigger entity (while enjoying the benefits that brings), Loney believes they almost future-proofed the response from the IFA community – renowned for brand loyalty – by ensuring that personnel, systems and processes had already started being aligned before the rebrand took place, such as customer service. This mitigated any negative user experience, rather improving it – softening the brand blow, as it were.

Looking ahead, whichever new government succeeds next year will be receiving a call from Loney to help tackle the UK’s shortfall of people with the right financial solutions in place.

With the cost of full advice being pushed upwards, Loney stresses the solution is not black and white.

“I don’t think financial education or guidance are alternatives to advice,” he stresses.

“What we do propositionally only becomes meaningful if it comes together with genuinely impartial financial advice. I think as people set about the long-term job of educating themselves and become more cognisant of the complexities of their circumstances they will become more likely to want to buy advice.”

Written By Sam Shaw