FSCS nil, nicht, nada, rien. HM Treasury £45.5M

A few weeks back I saw that Bank of Scotland were subjected to a fairly whopping fine for ‘Fraud Failures’.

IFAs may recall that in 2012 George Osborne was responsible for the diversion of financial services fines, (originally intended to be offset against the general costs of regulationto reduce the regulatory financial burden on firms that did do the right thing) to the Treasury.

Fines were and still are treated as a windfall revenue source to distribute on a political whim for whatever cause is assumed to be popular with the voting masses.

Osborne said, “It’s only right that fines from those who have demonstrated the very worse of values should go to support those who have shown the best of British values.”  

During 2014 Banking fines were £1,462bn. To put some contextual scale to this massive amount, the total revenues raised for alcohol and tobacco in 2014 was £1,970bn – that equates to 4% of total UK taxation revenues according to HMRC figures.

The FCA was obliged by statute to pay away £1.370bn of the fines the Treasury, the equivalent of 70% of alcohol and tobacco levies for 2014.

Fines are still not being used to reduce costs in a way that may, indeed should be expected.

In my view he is wrong, fines should not be used as a political slush fund to ‘big up’ a government, any government especially in a lead in to an election.

Fines are the purest method of demonstrating that the polluter pays. The FSCS should get this and any surplus after that goes to HM Treasury if they must have it!

Instead, HM Treasury used the fines covering up the military loss of life and limb with a blanket of banking ‘misdemeanours’demonstrates the very worst of politicians behavioural values, especially from differing  administrations of varying political hues (who had placed UK troops in harm’s way with little or no thought for their safety, wellbeing or exit strategy) and is just not on.

With this latest fine, I got this response in regard to an FOI request

“Under the Freedom of Information Act, I would like to know:

Bank of Scotland fined £45.5m for BoS fraud failures

I would be grateful if you would confirm how much of the £45.5m fine was retained by the FCA and how much was paid away to the HM Treasury?”

Your request has been considered, and our response is as follows:

The FCA pays to HM Treasury its penalty receipts after deducting its enforcement costs every year.  The FCA has already retained sufficient penalties to cover its 2019/20 budgeted enforcement costs in the current year and will therefore pay the £45.5m in full to HM Treasury in July 2019.

The entire fine paid to HM Treasury!!!!!!

Is this the right thing to do?

What about any surplus going to the FSCS?

Just a thought.

A nice little earner……..no more

“You make contact with your customer. Understand their needs. And then flog them something they could well do without.”

This appears to be the ‘outcomes view’ of the FCA on car sales and finance and as a result new and used car dealers commission is about to come under the FCA spotlight.

Has the FCA watched too many Minder episodes? Car finance is set to undergo a regulatory kicking of the tyres, a look under the bonnet because, would you believe it, the FCA revealed that it had uncovered unfair practices among some retailers and brokers in the way they make “commission” on sales.

It’s that dirty word again, commissions. The FCA is about to embark on a consultation to justify their unintended, but oh so foreseen by others, outcome and is set to kill off car buying for the ‘ordinary guy in the street by protecting buyers from themselves.

There may be a lot to criticise those ‘Daley- esc’ car dealers, especially those old school ‘bombsite’ traders offering ‘a nice little smoker,’ you know, the one careful lady owner, never crashed, written off, raced or rallied, full manufacturer service history deals and a year’s MOT.

But to just pick out commission in what is a very complicated, sometimes risky to the trade and buyer alike, process of car sales as being the root of consumer detriment shows a staggering disregard for consumer benefit being traded against consumer detriment.

People buy cars, not finance, it is not an advised purchase or sale, or was not until the FCA decided to open-up another regulatory opportunity. Everything to do with car purchase prices, finance or sale values whether new or ‘pre-owned is almost impossible to understand yet car finance forms a very important part of the pricing structure allowing dealers to make a margin whether they are manufacturer main dealers or not. Car finance and buying is the sum of a great number of parts.

The finance is secured, most times, on the vehicle, a highly moveable security. The buyer may not have a good credit history and loans can and indeed are priced according to risk.

That vehicle should be insured (another regulated sidebar and taxed) it should be MOT’d if over 3 years old. To drive it you need fuel (taxed) a licence, drive it badly and you could lose that licence.

Once you have the car, if it is a lemon your stuck with it. If finance is part of the deal, you have a cooling off period with a lot of small print that may prove hard to unravel.

Any car you buy instantly depreciates, a new one by the VAT element alone the minute you drive out of the showroom.

With all this legal and regulatory stuff already going on, to apply FCA regulation to just one part of the process will create a waterbed effect that will just result in consumer detriment.

The FCA reckon that “By banning this type of commission, we believe we will see increased competition in the market which will ultimately save customers money.”

Like everything else regulated, consumers are not always better off, they become part of that waterbed effect.

For those unfamiliar with the Waterbed effect, 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.

That bulge is normally only uncomfortable for the consumer it was designed to protect.

It is also another chance to throw some golden opportunities to CMC’c now that the PPI door has slammed shut.

The FCA say they will consult on the proposed new rules until 15 January 2020 before implementing them at some point during the year.

What this means, for those in the car industry unfamiliar with the workings of the FCA, is that these rules are already drafted and in place to go after very few respondents will have shown interest in responding because, rather like those in the advisory sector, they see little point.

The outcome will be fewer car sales, higher new car prices, depressed used values, more expensive finance, less access to finance for some buyers.

Why, because car sales are linked to finance. Rather like house buying. Gone are the days you ‘paid cash’, perhaps money laundering put an end to that, it is all about debt, depreciation, balloon payments and tax all contributing to the sales process

And like any business that relies on finance options the deal is the sum of the parts and having an a la cart ‘pop’ at one element……commission, is simply madness.

Here are various examples of car finance and incentives

Manufacturer new car finance either by hire purchase or PCP- personal contract purchase (where you buy the car with a small deposit and after say 3 years you can hand the car back or buy it outright or part exchange in return for another purchase.

A typical rate for a new Mercedes, with finance supported by the manufacture, could be 4.9% but the rate is conditional on taking that finance. Other incentives could be dealer contributions toward a deposit

PCH is personal contract hire, you pay a very low, often manufacturer supported monthly amount, for the use of a new car. You in effect hire it and at the end of the agreement you hand it back. Commissions are much easier to identify and could be up to £1000 plus any make on the car margin. The actual price of the car is another thing entirely, affected by other factors as depreciation up front and VAT reclaims.

Alongside these deals a buyer may be tempted with tactical campaigns where there is manufacturer support to switch brands, so say BMW to Mercedes, that is called conquest money.

Pre-registration is another method of getting car sales complete. Good deals for the manufacturer but not the dealership as these do not count against quarterly targets

Offers are also available for loyalty but not so common.

“Preventing the use of this type of commission would remove the financial incentive for brokers to increase the interest rate that a customer pays and give lenders more control over the prices customers pay for their motor finance, Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said.

There are many things that could be done to protect the vulnerable car buyer, regulating commission is not one of them.

Prices will go up, finance cost will increase, used values drop, that waterbed effect again.


FCA consultations, are they worth the effort? survey

The FCA carry out many consultations, all for very good reasons, at least we hope that is the case. But there is a suspicion in the intermediated distribution world that the reality is that the decision has already been made and that the consultation is there to demonstrate the inclusiveness of the regulator and nothing more.

I may be accused of being a bit cynical, perhaps over 45 years in the industry has caused some battle hardening, but just think about this a bit.

There are some 93,000 active, registered firms on the FCA 2018 register. There are 35,000 organisations with a single registered individual and 57,000 directly authorised firms who have some 120,000 individuals.

So, time to make an FOI (Freedom of Information request) asking; “I would be grateful if you would confirm the number of consultations carried out from 31 August 2018 to the 1st Sept 2019.  The size of the audience involved and in addition I would like to know the total number of respondents in that year and the average number per consultation?”

The reply I got started to ring the alarm bells.

“Your request has now been considered.  The FCA has carried out 39 consultations during the period in question.  However, we estimate that to comply with the rest of your enquiry would exceed the appropriate limit for complying with a request made under the Act, as set out in the Freedom of Information and Data Protection (Appropriate Limit and Fees) Regulations 2004.  Therefore, for the reasons outlined in Annex A below, section 12 (cost of compliance exceeds appropriate limit) of the Act applies.

When we refuse a request because the appropriate limit has been exceeded, it is our general policy to provide advice and assistance to the applicant to indicate how the request could be refined or limited to stand a greater chance of falling within the cost limit.  However, in this instance, we are unable to suggest a way in which your request can be refined to come within the cost limit”.

I have been concerned for a very long while that consultations are very poorly engaged with.

I asked Rory Percival for a steer.

He said “I imagine 100 or so for significant CPs but I imagine the figure is much lower for many so maybe a lower overall average. You should get a bit of a flavour by looking at some of the PSs where they list respondents”.

I asked him why it was so low?

He reckoned that “many think it won’t make a difference”.” I suspect the main reason as far as a firm is concerned is that there isn’t a culture of responding.

So, not to be deterred, I went back and asked if they could look at the numbers for the last 5 consultations. And got this reply that should make us all very afraid.

“Your request has now been considered, and I can confirm that the information you are seeking is available from our website. 

For ease of reference, the details of each of the five consultations falling within the scope of your request, the figures you have requested, and the page where the relevant details can be found are provided in the table below”.


Consultation details Number of respondents to the Consultation Paper
PS19/25: Overdraft Pricing and Competition Remedies: Policy Statement 12 respondents to our CP
(Page 6)
PS19/24: Illiquid assets and open-ended funds and feedback to Consultation paper 43 respondents to our CP
(Page 8)
PS19/23: FCA and PRA changes to mortgage reporting requirements 19 respondents
(Page 5)
PS19/22: Guidance on cryptoassets 92 respondents to CP 19/3
(Page 6)
PS19/21: Retirement Outcomes Review: feedback on CP19/5 and our final rules and guidance 62 respondents
(Page 5)


There were 228 in total, an average of 45.6 per consultation.

If firms think it makes no difference to the consultation outcomes, this data could support that idea pretty well indeed as to why firms do not engage.

In democracy, it is reckoned that the electorate deserves the government it elects, the theory based on the assumption that this is the outcome for low turnouts.

In this case regulated firms get the regulator they deserve, if some 93,000 regulated firms can manage to muster an average some 45.6 respondents per consultation. What hope is there for firms to engage with any FCA consultation if those responding feel there is not some very real input to shape positive outcomes that is listened to.

What is the point and why should they bother?



Brexit fallout, would you employ Olly Robbins?


I do not know him, have never met him or have any personal axe to grind but last week’s announcement that the ‘Rasputin’ of Brexit is to leave (when Theresa May leaves office) his  role as head of the European and Global Issues Secretariat, advising the Prime Minister on the EU and to oversee Brexit came as not a big surprise

Brexit has been a very toxic affair causing divisions of an unimaginable scale nationwide.

According to his Wikipedia page some interesting intelligence is gleaned, Robbins’s Brexit  role “led to some Conservative MPs blaming him for an anti-Brexit “establishment plot”, criticising him as “secretive” and comparing him to Grigori Rasputin.

A group of former military and intelligence officials associated with pro-Brexit pressure group Veterans for Britain including the former head of the Secret Intelligence Service Richard Dearlove said Robbins had “serious questions of improper conduct to answer” over defence and security co-operation between the UK and the EU after Brexit.

What was a surprise is that he is looking to follow the well-worn cabinet minister path to the City.

When a minister leaves office he or she should be subject to the Ministerial code, it sets out the standards of behaviour expected from all those who serve in Government.

The business appointment rules note that “Ministers will be prohibited from lobbying Government for two years. They must also seek advice from the independent Advisory Committee on Business Appointments (ACoBA) about any appointments or employment they wish to take up within two years of leaving office. Former Ministers must ensure that no new appointments are announced, or taken up, before the Committee has been able to provide its advice”.

The same rules apply to senior civil servants such as Olly Robbins.

But will they?

The business appointment rules for civil servants has key principles to be observed:

Integrity You must not misuse your official position, for example by using information acquired in the course of your official duties, to further your private interests or those of others.

Honesty You must not be influenced by improper pressures from others or the prospect of personal gain. 

Objectivity You must take decisions on the merits of the case. 

Impartiality You must not act in a way that unjustifiably favours or discriminates against particular individuals or interests. 

The rules note that civil servants should be able to move into other sectors, and that such movement should not be “frustrated by unjustified public concern over a particular appointment”.

But it is equally important that when a former civil servant takes up an outside appointment or employment there should be cause for justified public concern, criticism or misinterpretation.

The aim of the Rules is to avoid any reasonable concerns that:

  1. a civil servant might be influenced in carrying out his or her official duties by the hope or expectation of future employment with a particular firm or organisation, or in a specific sector; or
  2. on leaving the Civil Service, a former civil servant might improperly exploit privileged access to contacts in Government or sensitive information; or
  3. a particular firm or organisation might gain an improper advantage by employing someone who, in the course of their official duties, has had access to:
  4. information relating to unannounced or proposed developments in Government policy, knowledge of which may affect the prospective employer or any competitors; or
  1. commercially valuable or sensitive information about any competitors.

Robbins may have some fantastic commercial value but given the code constraints why would a big City firm want to employ this person in particular, given the hugely negative brand damage aura that his name could be associated with. I’m thinking here of the 52% who voted leave for a start.

Would a two year wait to head to the city be a good idea allowing the passage of time to establish what his real value may be to a prospective City employer as well as what his true cost to the nation may have been too?

Just a thought?

Guide to Marketing for Small and Medium Adviser Firms

8 Apr 2019

Guide to Marketing for Small and Medium Adviser Firms

When you run a business, especially a small to medium sized enterprise (SME) you wear many hats and one of them is the responsibility for marketing.

This can scare those who believe that marketing is a dark art of spin and promotion, when in fact it is a skill every successful business owner has in their DNA. Many do it without noticing every day.

The key is to harness this unconscious competency and ensure marketing is embedded and understood by everyone involved in manufacturing, promoting and administrating the products, solutions and services you provide clients, now and in the future.

This 82-page Guide to Marketing, written in association with Glassagh Consulting is designed to help anyone involved in running their own business gain a better understanding of what marketing is, how it can help your business and the techniques that can be used to become better marketers.


Guide contents

  • Twelve marketing pitfalls every business must avoid
  • What is marketing? The power of the 5 Ps
  • Your marketing plan
  • Why you need a marketing audit?
  • The right clients for your business
  • Segmentation
  • The importance of your client database
  • Your client proposition
  • Your client lifetime value
  • Creating your marketing goals
  • Marketing communications
  • Social media marketing
  • Direct Mail
  • Advertising
  • Public Relations
  • Sponsorship
  • Seminar Marketing
  • Reviewing and refining your marketing plan

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Is your Marketing working

Why choose Panacea Marketing?

Most business owners recognise they need to be doing some form of marketing if they want to develop their business.

Marketing can help you to attract more profitable clients and drive referrals. It can help you to demonstrate your unique value, show the range of services you offer and justify your fees.

These things are hard to put across without using marketing messages.

But with so many options available, choosing how to market your business can be difficult.

What should you really be doing, how should you do it, and how much should it cost?

Working in partnership with Faith Liversedge, financial marketing expert, we’ve developed a series of free marketing checklists to help you benchmark yourself against industry best practice.

Faith is also offering a number of Quick Win solutions to help you fast-track your marketing. These Quick Wins will help your business to stand out, get found and convert your target market into ideal clients.

Whether you’re marketing your business for the first time, or think your marketing could do with a boost, take a look at the below and get in touch with Faith for more information.

07920 042240


Free marketing checklist

Effective marketing can help your business to become more profitable. But done wrongly it can be a waste of time, money and effort. Find out what ‘good marketing’ for financial advice firms looks like by downloading this checklist.

Download here

Free website checklist

What does your website really need to attract more visitors? What information should it include about you? How does it get on page 1 of Google? Download this checklist to find out what your website needs to be firing on all cylinders.

Download here

Free SEO checklist

SEO, or ‘search engine optimisation’, is the process of making sure your website is set up correctly so that search engines like Google can rank you favourably. Does your website have what it takes? Find out by downloading this checklist.

Download here

Free blogging checklist

What should you blog about? What should it include to make sure it gets found and read by the right people? This checklist will tell you what you need for an effective blogging strategy.

Download here


Quick Wins

30-minute consultation call

Book a 30-minute call with Faith. She’ll tell you at least 3 things you can do to improve your marketing right now.

Cost: £75 + Vat


Digital Marketing Report

This 6-page document will give you a detailed technical analysis of your website and social media profiles so you can find out what’s really going on behind the scenes.

It will analyse your:

  • Keywords
  • Traffic
  • User behaviour
  • Sales funnel
  • Technical performance
  • Content

£300 + Vat



Having a video brings your brand bang up to date. It helps your clients to engage with your message, gives you something to send to introducers, and to use at seminars and events.

Video also helps your Google rankings: you’re 50 times more likely to show up first if you have a video embedded on your site.*

Faith will supply your own-branded video that is easily uploaded to your website. Choose from:

  • What is financial planning?
  • What is a Chartered Financial Planner?
  • This is how life happens

£595 + Vat

*Source: Moovley, April 2018


Client segmentation + marketing strategy

Client segmentation, done correctly, is the most effective way to identify the clients who can provide you with the most profit going forward. And those who won’t.

It’s now also a compliance requirement, particularly in terms of MiFID II and PROD 3.3.

Client segmentation, coupled with a marketing plan, will enable your business to move forward.

This solution will enable you to:

  • Demonstrate to the FCA you’re providing appropriate services and investment solutions
  • Take the guesswork out of your marketing
  • Build long-term client value

£1,500 + Vat


Book now

To take advantage of any of these opportunities contact Faith Liversedge on

07920 042240


About Faith

Faith is an experienced communicator with a wealth of knowledge and understanding of the adviser profession.

She was Marketing Manager at Nucleus for 5 years, creating innovative and award-winning campaigns. Before that she worked for Standard Life, Prudential and Royal London.

In 2017 she set up her own consultancy to help forward-thinking financial advisers and planners to become more profitable through websites, communications and other laser-focused marketing techniques.

Find out more at www.faithliversedge.com

We don’t need no stinking badges. Oh yes you do, now

Panacea comment for Financial Advisers and Paraplanners

23 May 2019

We don’t need no stinking badges. Oh yes you do, now

CMC’s are about to have some insights into what regulatory reality should be about.

The word from ‘Endeavour Square is that “We will be out, and we are starting to think which firms we’re going to visit in the next days and weeks.”.

Many will be aware of all the work done since July 2012 with the MoJ’s Kevin Roussell by Alan Lakey and I to root out this scourge. Sadly for Kevin he died just before his work went live.

To assist the FCA with their thinking we have set up a ‘whistle-blower’ form so that the hundreds of advisers who have been on the receiving end of some appalling behaviour can assist the FCA in the search for ‘bad actors’ as they transition from regulatory fantasy to regulatory reality.

In particular we will expect them to look at those firms where there is a consistency of badness. If any of you have taken them to court to recover costs do note this.

The form is short, but we would expect you to give some comments that can cite specific case names and dates. We would appreciate your name, but this will be redacted from the submission to the FCA.

You only need to complete the fields with * next to them but it would help us if you include your personal details should we have any queries. Please be assured that your submission will be kept confidential and we will not share your contact details with anyone in relation to this matter.

PPI Claims Management Company*
PPI CMC Web Address*: