Trains, planes and?

Trains, planes and?

Have phones at work become the new smoking in the workplace?

A walk into any office, anywhere in the UK, will make clear that attention to the job in the workplace during working hours is being jeopardised by the use of mobile phones.

Mobiles are everywhere today, you cannot escape them. In the office, on the train, in the street, the office, the plane, the underground, cinema, restaurants, theatre, gym, spa, saunas- all areas I have experience of although I may have forgotten some.

Even the delivery room is not out of bounds. Constance Hall, in our image, has snapped back at ‘mummy shamers’, who said that it was ‘poor parenting’ for her to be on her phone!

The streets are being walked by individuals in a zombie like trance, gazing in thrall at screen content- a book, an e mail, a movie. Even mothers with babies in prams and pushchairs are not exempt. And in some cases, sadly, death has followed.

A recent RAC Report on Motoring revealed a significant increase in the number of drivers admitting to using a mobile phone at the wheel. According to the report, between 2014 and 2016 this figure has risen from 8% to 31%. Regardless of the reason, any distraction behind the wheel can lead to accidents, severe injuries and car write offs.

In January this year, the Trump White House issued a new ruling banning the use of personal cellular devices in the West Wing, citing security concerns

From what I see on my way to meetings around the country, mobile dependency is so bad that the use of phones is almost the equivalent corporate time waste of office smokers who regularly decamp for a puff at the expense of their non-smoking co-workers although I guess some multi-tasking with Phone and fag could occur.

I would be the first to declare that I have an iPhone and iPad, but I yearn for some quiet time both in and out of the office.

Train journeys are a nightmare, even in so-called quiet carriages. You are never more than a seat away from some idiot shouting down a phone. Along with their loud summaries of the most important business deal ever done by anyone, anywhere, anytime, conversations also contain stock phrases like ’I am on the train’, ‘Sorry, I just went through a tunnel’, must be a dead spot’, ‘can you e mail me that’, ‘sorry can you say that again’.

The conversations often contain corporate buzz phrases like:

At the end of the day, Sophie will take the lead on this, Colin will be having a 360,Ecosystem, Better run this with the scrum master, start building consensus, We’re working in silos here…….I could go on, perhaps you may wish to add some that irritate below?

“Distracted walking” incidents, according to the National Safety Council “are on the rise, and everyone with a cell phone is at risk. According to a Governors Highway Safety Association report, there were nearly 6,000 pedestrian fatalities in 2017. This number mirrors 2016 fatalities”.

We are losing focus on our surroundings and putting our safety – and the safety of others – at risk.

The solution: Think about your surroundings and those around you. Stop using phones while driving, walking, in the gym, spa, getting off trains, buses and planes, on crossings too. Amazingly over half of so called distracted walking injuries occur in our own homes, proving that we need to stay aware of our surroundings, whether they’re new or familiar.

We have all sorts of ‘cause’ days, weeks or months in the UK today, the time has come to have a ‘cause’ month for not using a mobile device for calls, texts and e mailing in ALL public places?

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The Three Certainties of Human Life are Death, Taxes, and more regulation

The Three Certainties of Human Life are Death, Taxes, and more regulation

“The regulator has found concerns over value for money in drawdown, including significant variance in charges, which can be complex, opaque or tough to compare, so has set out plans to force firms to show a one-year charge figure in pounds and pence in the key features illustration they provide to consumers”.

It is a commercial world out there and I can think of no other industry that has a regulatory insistence that charges for what they make/ build/ sell have to be granularly declared.

When you buy a new house, is there a breakdown of building and material costs supplied with the contract? The same with a new car: design.testing, parts and labour. A prescription drug does not come with a breakdown per tablet for research, development and testing, a holiday cost does not breakdowns for flights, hotels, food, drink or flight. Supermarkets do not declare what the business costs are for selling you a pack of sausages.

A bit simplistic I know but if regulation stops messing with fixing what in many cases is not broken and more people use a financial adviser, the world of independent advice and consumer trust may be a better place.

As an owner in the 1970’s of a waterbed (with the attendant life affirming fond memories) the illustrative metaphor of the movement in a water-filled mattress seems to be a common sense albeit simplistic description supported by a little known mathematical formula called Bode’s Sensitivity Integral.

Bode’s waterbed theory ‘outcome’ is already well illustrated in the mobile phone and utilities industries where regulation and political interference fixes or manipulates the prices of basic products and services only for consumers to see complicated pricing structures ensue by way of significant increases in the price of peripherals and additional services as a direct consequence.

Thiseffect is a phenomenon that should increasingly cause concern to those who regulate the industry and those it regulates in regard to pricing and the detriment the post RDR world has wrought upon the intended beneficiary- the consumer.

It is the natural but not necessarily intended potential to squeeze one part of a complicated and complex regulated business model (and the attendant regulatory processes) to cause a serious bulge elsewhere in the process.

So, the theorising in RDR should have foreseen that in achieving:

  • the elimination of bias in the market
  • ensuring the adviser is the true agent of the consumer
  • clarity over the costs of advice
  • and various other factors,

the industry would no doubt see the bulge appear somewhere else.

And this has been seen in costs in every conceivable way and particularly for consumers.

Cost is something that FCA regulation incurs for firms, often with little thought of logic or affordability and with little benefit analysis being done on the consumer impact and detriment it created.

So how else did the theory manifest itself?

In ensuring the adviser is the true agent of the consumer, the result was that the mass-market consumer did not, does not want to pay for advice that had previously been seen as free.

When a consumer is able to obtain lower prices from an adviser or a provider for drawdown, is it possible that other consumers will have to pay more for the same input from another adviser or provider firm as a result?

Is this bad for consumers?

The asymmetric exercise of regulatory or consumer power can lead to consumer detriment through raising other consumers’ advice and provider charges- the Waterbed effect.

While a large and powerful provider firm or distribution channel improves its own terms by exercising its market power in getting cost reductions, the terms of its lesser resourced competitors can deteriorate sufficiently so as ultimately to increase the average price of advice – the Waterbed effect.

It seems to me that the only organisations in the world of financial services that should raise serious “concerns over value for money, including significant variance in charges, which can be complex, opaque or tough to compare” are the FCA, FOS and the FSCS. 

We never see a breakdown of costs, budget breakdowns yes but costs????

IFA Antony Cousins at SPF rightly comments that “value for money has always been important to clients, however with returns from financial products expected to be lower over in the short to medium term, the level of charges are now even more relevant.  For many years Financial Advisers Fee Agreements have had to specify the exact service(s) being provided and the associated initial and ongoing cost in pounds and pence, hence I see no reason why providers illustrations for drawdown should not follow this model”.

He goes on to note that this should be“coupled with an educational programme to enhance customers understanding of a highly technical area would remove some of the scepticism in the industry”. 

There is some suspicion that the FCA are more concerned about clients going direct to providers in this drawdown market and not taking advice where we have to stipulate and review all these costs.

Regulation has created a race for the bottom on price. I am not sure that the average consumer ‘buys’ financial advice on the cheapest cost. I think that for the mass market consumer it could be about not paying anything at all as they see the pension plans providers they have been invested in for years should provide that advice for free.

This is in turn a problem for providers who are predominantly distributing their products via the intermediated channel. They do not want to carry out work, with added customer care regulatory liabilities or redress, that they see, is an IFAs role. But if the client has either been disenfranchised by RDR segmentation or just does want to pay what else can be done.

Waterbed effect at work again????

Is it all still ‘Pete Tong’ at the FOS in 2018?

Since 2011 we have been conducting research via a simple survey to gauge what advisers think about service levels and standards delivered by the FOS, in particular looking at their processes and the fairness of the system.

The first survey ran in 2011, then 2014 and finally, our last was in 2016, with the same questions.

A particularly disturbing trend was the increase of firms who had experienced false or manufactured accusations from complainants in an attempt to gain compensation, which went up from an already large 64% in 2011 to 74% in 2014.  

2016 continued to show a consistent negativity of experience.

So, what does 2018 look like?

Another two years have passed, and we want to know, will 2018 see any improvement on the:

  • 71% of advisers that felt FOS adjudications are unfair?
  • 69% of advisers that felt adjudicators help create complaints where no complaint existed?
  • 85% of advisers that felt FOS rules place an adviser or firm in a ‘guilty until proven innocent’ position from outset?

FOS Review

Channel 4 ‘Dispatches’ itself tackled the FOS earlier this year, painting a rather bleak picture of operations. As a result of the programme, FOS Boss Caroline Wayman has launched a review so it could “better understand and address the concerns” raised by Dispatches. This will be reported to Parliament shortly before summer recess.

Hopefully our survey, which will be shared with the FOS and Nicky Morgan (Chair of the TSC), will prove timely, and for Ms. Wayman provide a view of the FOS from an adviser perspective. And the industry itself can ponder if things have got better or not since 2011, 2014 and 2016.

Please complete the anonymous, 5-minute survey below and share it with your colleagues.

Your input is important, vital and greatly appreciated.

Will GDPR destroy businesses?

Will GDPR destroy businesses?

The date is upon us.

GDPR was a cunning plan thought up by the EU. Europe’s data protection laws have long been regarded as a gold standard all over the world. But over the last 25 years, technology has transformed our lives in ways nobody could have imagined so a review of the rules was needed.

In 2016, the EU adopted the General Data Protection Regulation (GDPR), one of its greatest achievements, they say. It replaces the1995 Data Protection Directive which was adopted at a time when the internet was in its infancy.

The GDPR will be recognised as law across all the EU member states today, the 25thMay 2018.

But will it actually see the destruction of many businesses. Mailing lists and research data built up over years may be rendered useless if those businesses do not have consent to keep in touch or hold that data?

Companies are worried about the impact non-compliance could have, many fear that negative media or social coverage could cause their organisation to lose customers and they are very concerned that their brand image, built up over very many years, would be de-valued as a result of negative coverage.

Although this is an EU directive, it also affects businesses globally who interact with European customers seeing some applying blocks for their customers in the UK and Europe. American news websites including the New York Daily News and Los Angeles Times are among those which have temporarily shut down in Europe along with many others who sell goods online to the UK & Europe.

The privacy of the individual is hugely important, especially when set against the intrusions of governments. GDPR is potentially putting the brakes on innovation and risks punishing companies for situations beyond their control.

There are some ironies too. The EU wants to give individuals unfettered access to the data that companies store about them. Yet the EU is not transparent about its own operations, including the voting records of MEPs and the lobbyists who try and shape EU policy in their favour.

GDPR takes little notice of how data is a vital raw material of product and business innovation. It is likely to stifle data-driven innovation as well as helping to reduce operational costs.

Rather like a lot of regulation in the UK, learnings only come when it is way too late. In this case let us hope that businesses, especially smaller businesses can survive the impact of GDPR, both seen and unforeseen.

As a footnote, this is the most perfect opportunity for scammers to use GDPR as a way of getting you to click on a link in a phishing e-mail that you shoud not. DO NOT click on any e mails where you do not recognise the sender or the address it purports to come from.

A Brave new world

A Brave new world

My father worked for the ‘Pru’, joining them after the end of WW2. The ‘Man from the Pru’ was him, a suited figure striding forward with that strange roof shaped umbrella logo. And income tax for him was at 98%.

This was the age of the mega (although that word did not exist then) insurer brands: Royal London, Norwich Union, Cornhill, Legal & General, Standard Life, Scottish Amicable, Scottish Life, Scottish Equitable (that’s enough Scottish-“Ed”).

Most were mutual. Nobody questioned cost, life office expenses, bonus levels, solvency, maturity pay-outs or even commission. The consumer had to rely on the integrity of the insurer and their way of treating customers fairly, which in those days seemed pretty good indeed, and not a regulator or ombudsman. And all without the technology of today, not even electronic calculators.

Endowment based investments performed well, unit trusts were around, you could buy stocks and shares via your bank, but the plethora of investment firms we see today had not really landed on UK shores until ‘Big Bang’ ‘rocked up’ on the 27th October 1986.

So, with the latest announcement from Prudential are we seeing a continued slow decline among the largest life offices or are we entering a brave new world?

I think neither.

That ‘BNW’ was enter in 1986.

I was working in the City at the time and the financial services world, as we knew it changed forever from that date. The late starts, long lunches, early finishes were no longer fashionable, everybody started dressing like Gordon Gekko, huge mobile phones were ‘hand borne’ not hand held, the colourful LIFFE boys would strut their stuff around the Royal Exchange between trades and generally life seemed to have a very particular and agreeable buzz.

Over the past 30 years what was once a rather staid gene pool of public school chums in pin stripes, a veritable gentleman’s club of friends and relatives, had morphed into a US-stylisation of business practices.

With it came dress down Friday, the skyscrapers of Canary Wharf and the City all linked with the considerable diversity introduced by foreign banks as plus points, but, the downside was that it came with a certain killer instinct that would mean even your friends and colleagues were not guaranteed a particular benefit without a cost attaching.

But in the post big bang world, as Mr. Gekko would say, “if you need a friend, get a dog”.

In the feeding frenzy Barclays paid huge money indeed for Wedd, Durlacher and de Zoete and Bevan, Deutsche Bank ate up Morgan Grenfell, Midland Bank (who are they) bought W Greenwell and this then got digested by HSBC. Kleinwort Benson bought Grieveson Grant, and NM Rothschild devoured Smith Brothers.

And what of the “Gentlemen and Players”?

Well they all retired to their stockbroker belt houses and country estates swapping pin stripe for tweeds, having “trousered” some very serious money.

With this sea change we saw the disappearance of those traditional and cautious values, my word is my bond, trust, nods, winks and tips were all to be replaced by what is now seen in many quarters as a strange mix of treating customers fairly, compliance, compensation, redress, learnings, reckless abandon, using somebody else’s money to trade on your own account for the benefit of the Banks who employed you and more importantly yourself.

So, the big life offices have gone the way of all flesh where they could not adapt to change

Is it a change for the better, well I am not so sure

This article appeared in FT Adviser on 15th March 2018

How much is that doggie in the window?

Panacea comment for Financial Advisers and Paraplanners

26 Feb 2018

How much is that doggie in the window?

This HMRC document hit my desk last week. What a great idea, it shows how your ‘hard earned’ is spent by the state on your behalf.

Out of a tax take of £19,302 the welfare spend is more that the amount taken for servicing the national debt, education and defence combined. And they are the 4th, 5th and 6th highest spends.

Welfare accounts in this case for almost 25% of this total tax gathering for 2016/17.

I used to hear a lot about hard pressed families in the lead up to the last couple of elections and I think there was a strong political point to make, but the point set the wrong thought processes off.

If this taxpayer is anything to go by, those hard-pressed families could be in such a situation because 25% of each taxable element of their working day is spent on providing welfare of some sort to recipients various and unknown.

Perhaps in the brave new world of disclosure, this document should give a breakdown subset of how this money is spent, where it is spent, who spends it and on what exactly.

There are some other very interesting perspectives thrown up in this document. The last in particular around the UK contribution to the EU budget. It is just £135, some 0.7% of the total bill.

I was/am very keen to see Brexit actually happen. I doubt it ever will.

But instead of sending buses around the country with messages on the side illustrating how much could be made available to add to the £3,918 from this tax bill on the NHS in the run up to the referendum, voting may have been somewhat different if the amount each taxpayer actually contributed to the EU was set out just like this.

I await another statement for 2017/18 that I assume will show how much has actually been spent from this income tax breakdown on Brexit?

Sadly I fear we will never know.

 

Stinking badges 3

Panacea comment for Financial Advisers and Paraplanners

23 Feb 2018

Stinking badges 3

For those of you who remember the Mel Brooks classic ‘Blazing Saddles,’ the town of Rock Ridge was being held to ransom by out of control Mexican bandits who proudly proclaim to the Mayor, Hedley Lamarr, that in a town with no sheriff, to cause havoc they “don’t need no stinking badges”.

So fast forward to the 21st Century where Rock Ridge is now ‘policed’ by the new bandits in town- Claims Management Companies (CMC’s)

Wheels turn slowly, but those who recall our campaign, with Alan Lakey, on the regulation of CMC’s will note some very positive ‘outcomes’ after a number of meetings with Kevin Rousell, Head of Claims Management Regulation Unit at the Ministry of Justice.

Kevin recently let me know that the House of Commons was working on the FINANCIAL GUIDANCE AND CLAIMS BILL [LORDS] Public Bill Committee: 25 January 2018.

In ‘Blazing Saddles’ parlance, Bart has just ridden into town.

There is an amendment which inserts a provision into the upcoming Privacy and Electronic Communications (EC Directive) Regulations which prohibits live unsolicited telephone calls for the purposes of direct marketing in relation to claims management services except where the person called has given prior consent to receiving such calls.

Do read the whole bill but in particular section N6 which states:

Financial Guidance and Claims Bill-[Lords], continued

After regulation 21 insert—

“21A Calls for direct marketing of claims management services

  1. (1)  A person must not use, or instigate the use of, a public electronic communications service to make unsolicited calls for the purposes of direct marketing in relation to claims management services except in the circumstances referred to in paragraph (2).
  2. (2)  Those circumstances are where the called line is that of a subscriber who has previously notified the caller that for the time being the subscriber consents to such calls being made by, or at the instigation of, the caller on that line.
  3. (3)  A subscriber must not permit the subscriber’s line to be used in contravention of paragraph (1).
  4. (4)  In this regulation, “claims management services” means the following services in relation to the making of a claim—
    1. (a)  advice;
    2. (b)  financial services or assistance;
    3. (c)  acting on behalf of, or representing, a person;
    4. (d)  the referral or introduction of one person to another;
    5. (e)  the making of inquiries.
  5. (5)  In paragraph (4), “claim” means a claim for compensation, restitution, repayment or any other remedy or relief in respect of loss or damage or in respect of an obligation, whether the claim is made or could be made—

(a) by way of legal proceedings,

(b) in accordance with a scheme of regulation (whether voluntary or compulsory), or

(c) in pursuance of a voluntary undertaking.”

Readers may wish to refer to “Stinking badges 2” from August 2016.

It is well documented how claims management companies have plagued this industry in recent years.  Many of these have lied, cheated, deceived and generally operated in a base and underhand manner.

Alan noted “The Ministry of Justice unit at Burton on Trent had been unable to deal with the excesses in a sensible manner and when foul behaviour has been determined the response is often the equivalent of a slapped wrist and a bad telling off. 

Hopefully this bill will sound the death knell at long last for this legally assisted parasite that feeds off the world of financial services.