Panacea Comment for financial advisers and paraplanners It’s a funny old game

I read that despite some 40 years of being told that butter is not good for you the processes that led to this conclusion were flawed, lacking in any solid trial evidence to back it up.

In fact it is suggested that ‘fat bastard Britain’ is in fact now the fault of scientific work in 1983. The BMJ journal ‘Review’ says it is “incomprehensible that such advice was introduced for 56million Britons in 1983”.

Well I guess that the scientists, like almost everyone else in the UK, will have the benefit of longstop protection, because if they did not, can you imagine the long line of CMC’s that would be forming now making claims stick for sending people down the ‘wrong dietary road’ for 40 years, seeking compensation for being ‘miss- fatted’ and being ‘advice deprived’ of the pleasure of full fat foods.

What is it about being wise after the event that is OK for some and not others?

It seems if you were a 60’s or 70’s celeb, financial adviser or politician of that era you will be ‘hung by the neck until dead’ for what many would consider to be a mix of some poor temptation based, wise after the event actions or decisions when opportunity presented itself and some ‘he said she said’ trial by public opinion or the FOS.

Yet if you have been responsible for giving very poorly researched health advice to some 56m Brits consistently over 40 years, life continues as normal.

APFA are meeting with the FCA later this month to press the case for a longstop.

Alan Lakey, a long time supporter of the ‘Longstop’ cause notes that Britain has long prided itself on being a bastion of fairness in an otherwise unobliging and inhumane world yet Parliament has seen fit to devolve virtually unlimited power to a non-accountable limited company status quango which has chosen to override statute and remove a basic human right from a small number of UK citizens.

This removal is made less palatable by the knowledge that when the FOS was being consulted on in 1999 the FSA promised that its strictures would mirror UK law.  This promise was broken without recourse to Parliament or the industry.

Now that the post-RDR world is comprised of professional, qualified advisers – who must agree some fee structure with their clients and must hold adequate professional indemnity insurance – it is entirely appropriate, fair and morally correct for the FCA to restore this basic human Longstop right.

In a week that we hear from a community member of an FCA positioning statement, all advisers should be very afraid of a lack of Longstop.

It says:

“There is no such thing as an insistent client.  If a client wishes to take a course of action contrary to your recommendations, then a letter signed by him/her to the effect that you will not be held responsible should a bad outcome result will NOT be accepted by the FOS. 

A complaint will be found against you for having allowed the client to do what you knew to be the wrong thing and took payment for it.  Your only option is to decline to act further”.

I hope that those in the chair at Canary Wharf meeting will have ‘boned up’ on their research around what consumer detriment ‘Longstop’ reinstatement would bring in a more considered way than our oh so clever scientists looked at consumer health in 1983 as FOS views like this one above will pursue firms to the grave.


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