Brexit fallout, would you employ Olly Robbins?

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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?

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Alexa…..

In November 2017, the now ‘late’ Professor Stephen Hawking issued a chilling warning about the imminent rise of artificial intelligence. During the interview, Professor Hawking warned that AI will soon reach a level where it will be a ‘new form of life that will outperform humans.’

There is a move afoot to bring the delivery of financial advice into the 21st century. After all, with the smart phone, tablet and virtual reality all breaking through boundaries, why should financial advice not find itself in the vanguard of change?

It should work, could work, but will not work until something very simple yet clearly requiring a considerable volte-face takes place.

So, here’s a thought for you lovers of Steve Jobs and even Ned Ludd.

I had a e mail today from Marin Software. It started with this statement: “Advertise Where Your Customers Are” and linked to an interesting article around Amazon advertising opportunities.

It observes: “When buyers search for a product, they’re increasingly turning to Amazon as their first stop. There’s no doubt that Amazon advertising is on the rise, but is it enough to loosen Google and Facebook’s iron grip on the digital advertising landscape”?

Steve Jobs reckoned that “Older people sit down and ask, ‘What is it?’ but the boy asks, ‘What can I do with it?”.

Smart technology exists and is readily available in the average home. Algorithm based analytics are there, right now, to deliver for the mass market an automated method of providing the average family with the ability to self medicate their financial ailments and prescribe a solution.

This happens in many areas of web based life today so why not financial services?

Robo-advice must be in the cross hairs for Amazon, they sell pretty much anything for anyone and are the masters of the Algorithm.

Amazon presents the world of financial services distribution with a challenge and an opportunity, at the moment a simple search for ‘Financial services’, life insurance, ‘pensions’ or any other search permutation offers up hundreds of books, but no access to actual advice.

How long until you will be able to simply say ‘Alexa, a pension/ annuity/ life cover’. And for Amazon, no warehouse space, packing or logistics of delivery.

Mr Bezos, over to you.

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Photo by Fabian Hurnaus on Pexels.com

Who needs Arnie when you have this lot

There is a radio advert I heard for an organisation called Money Redress. Their campaign focussed on the miss selling of SIPPS, the hot topic today, passing by PPI and with much higher rewards.

The firm is not alone, in BBC speak, other claims companies are available.

A typical pitch is:
Not aware how the money was going to be invested? 

 Pressurised into making an investment

 Not fully informed of the level of risk involved

 Your money was used for a high-risk venture without your understanding or agreement

 Told 100% of your money would be returned but lost you money!

 The investment was unsuitable for your needs

 Access to your money was limited when you were told you would have full access

 You might also have been misled over charges

 Promised investment returns that didn’t happen

There are a number worrying things about the advertising style used in this case, the strap line for starters is to text “WIN” to the firm.

The firm in question has a relationship with a regulated advisory firm and that in a way is part of the whole problem.

Sadly, it seems that there is often a connection between CMC’s and IFAs, something the FOS is quick to point out. In the above scenario the CMC will use the regulated aspects of their business interests to move a potential claim along.

Many CMCs either have a connection to a former financial adviser, or even a connection with an investment product and may have sold those products before!

I am aware of one former adviser, who having retained client records he should not have done, going back to the former employers’ client base to engineer claims for advice he had given.

However, using former connections is not the only way CMCs are able to find the right data.

Some CMC’s are making ‘Subject access requests (‘SARs’). These allow the requesting CMC to see the client data held by a data controller at an advisory firm. SARs are not a right to request documents, only the data itself, yet the CMC’s try to use these ‘SARs’ to request all documents held about a client.

Any CMCs presenting SARs as a legal right to get copies of documents in order to manufacture a claim should not be, indeed the courts are clear that an SAR is a right to data, not to documents. In January 2004 the Court of Appeal was clear in the case of Durrant v FSA,  that an SAR is not a replacement for pre-action disclosure.

I have also heard that some CMC’s are looking to buy the database asset of defunct firms from receivers who are winding up the firm. The value not being the trail commissions but the files to trawl for blame to lodge a claim with the FSCS.

Financial services compensation culture has led to the expectation that a complaint can be a lottery ticket, purchased by simply texting ‘WIN’, that with a little luck can reap huge reward, irrespective of any truth or merit. Our recent FOS survey, with 212 respondents, showed that 72% of those advisers responding had experienced false or manufactured claims with a view to obtaining compensation.

Complaint resolution should always be based on the evidence available and if not on the balance of probability, factoring in the advice given in relation to needs and aspirations of the client at the time of the advice, not a complaint re-engineered 10,15 or 25 years later.

An active firm can defend that position, a defunct firm cannot and so off it goes to the FSCS who would have no idea if the claim false or manufactured. The outcome, in regulatory speak, is that firms then see a call from the FSCS to pay the CMC’s fees. You could not make this up.

The financial services industry is littered with examples of self-harm and opportunism. This type of proxy opportunism does the fight to restore trust little good.

FOS treating IFAs as ‘guilty until proven innocent’

Did you believe the FOS help complainants create a complaint where none existed?

This was just one of 15 questions answered in the FOS survey we ran during June & July which received 212 responses. Many thanks to all of you who completed the survey and for the hundreds of really inciteful comments that really put some flesh on the answer bones. As with all our surveys, it is the comments that make for such interesting reading.

The final ‘score on the door’ for that question? 66% believe that the FOS help complainants create a compliant where none existed!

Very worrying indeed, but it is some comments added, beyond a simple yes or no that should really start ringing bells with the FOS. For this question some comments were:

  • Where they feel inclined they will stray from the complaint in order to favour the customer with a positive outcome even if it has not been the subject of a complaint.
  • There was a case where a client was making a complaint against a DB scheme, but when FOS realised the company concerned wasn’t on its register, the FOS employee suggested the client complain against us!! 
  • I believe that complainants are apt to add to their initial complaint when in conversation with the Ombudsman and I know that FOS will look at the wider picture if they feel it is reasonable to do so 
  • Yes, there is no doubt that the process is not to seek a resolution of the complaint made, but to ensure that there can be no suggestion that the FOS have not investigated any opportunity for a clients’ complaint to succeed. 
  • The FOS demonstrate the view that all complainants are innocent and honest and that the Industry is corrupt and incompetent. So, if they can dig into a complaint and find an alternative angle they will do it

Another question asked was: “Do you think FOS rules and process place an adviser or firm in a ‘guilty until you prove your innocence’ position from outset or have you generally found them to be fair?”

83% agreed, some comments are:

  • I have yet to see an initial complaint letter which does not make the adviser look guilty, otherwise there would be no complaint. It has to be, therefore, that the adjudicator is biased towards the complainant until the defence is provided. 
  • Absolutely. To the point that I have decided to stop investment advising in the next 12 months. I now consider the risks too high. All of the cases I have read, or been involved in, seem to work on that basis – “prove that you didn’t do it”
  • Our Judgement was based on the argument that the complainants view had to be more likely and not just as likely as our own. 
  • It is difficult to answer this however the rules mitigate against a ‘fair trial’ and in that respect there is an imbalance. As Walter Merricks famously stated to a Cardiff Conference in 2003, it is like a game of football where one side is playing uphill.

Worryingly, we also observed the following:

—  55% of respondents had no idea as to who the FOS is accountable to.

—  72% had experienced false or manufactured claims with a view to obtaining compensation

—  95% felt that the adviser should have the same rights as the complainant to appeal to the courts when unhappy with a decision rather than an than expensive judicial review

Full results will be shared with you soon, but in the meantime, a copy of the results has been sent to the Treasury Select Committee, the FOS and the FCA.

As yet we have had no responses apart than from the FCA thanking us for “sharing the findings of your latest FOS survey. It makes for interesting and occasionally provocative reading”.

The survey results have also been picked up by FT Adviser who were interested to know if the report findings were perceptional or based on actual experiences?

Our view is that although we cannot be 100% sure, either flags an issue. If perceptional then the FOS has work to do the change those perceptions. If they are actual, then work is required there too.

We hope, in regulatory speak, that ‘learnings’ will be taken from this to ensure that the original intent for any Ombudsman is to resolve complaints based upon the balance of probability and/ or any evidence that may be available.

We do not look to favour one side over the other, but looking at all of our FOS surveys from 2011 to 2018 there does appear to be a consistent  and ongoing view in the world of financial advisers that simply cannot be ignored.

To view full results click here

Read the article in FT Adviser

Tattoos and the workplace

hirefireNow I do understand that as the generations roll on, standards and expectations in business do not always meet with what would have been deemed acceptable in my younger days, but after my recent meeting with my new business banking relationship manager, something appeared very wrong in the world of banking and possibly elsewhere.

Tattoos are not everyone’s ‘cup of tea’ and it is a sad fact that they can, in extreme cases, give an impression that may quite unfairly, not match with the individual’s actual personality, capability, lifestyle or knowledge.

Self-expression for ‘my generation’ by way of ‘inking’ was once strictly reserved for south sea islanders, bikers, teddy boys, the military and the criminal classes. Today it has found its way into the boardroom. Men and women equally seem to exercise some poor ‘placement judgment’ at the tattoo parlour as the nations low literacy skills present ‘inkers’ difficulties in getting the spelling right as the big new danger.

According to ACAS “About one in five British people are thought to have one, and they’re most popular among 30 to 39-year-olds, with more than a third admitting to being inked and one in ten people in the UK are thought to have a piercing somewhere other than their earlobe”.

They go on to note that according to a recent study this particular practice is “extremely popular among women aged 16 to 24, as almost a half (46 per cent) are alleged to have a non-earlobe piercing.”

Although the ‘blue collar’ world is loosening up, not all ‘white collar’ financial services firms, large and small across the UK are ready for studded and inked employees since it’s only recently that tattooing and piercing have become so very mainstream.

Indeed, most small businesses I have spoken with do not have an ‘inking and body art’ policy in place.

Dress down Friday has not yet been replaced by ‘ink up Monday’, or has it?

I am not sure what image anyone these days is looking for in a bank manager but I would suspect that putting Captain Mainwaring to one side, one would perhaps expect a sense of some form of ready for business etiquette by way of dress, a certain understated sense of business interest, professionalism and enthusiasm.

It may be that todays employers are so ‘hog tied’ by human rights and political correctness that staff who are in customer facing roles can turn up for work as if they were either off to the pub with their mates or have just come from the pub and have not had time to prepare themselves for what pays the salary.

My new banking relationship manager was around early thirties, he was scruffy and had an enormous dark blue ‘Polynesian style’ tattoo extending the length of his arm to below his wrist, what may be elsewhere was best not contemplating.

Putting aside any prejudices, is it so wrong to expect that even in today’s world of more casual business standards, anyone in a financial services customer-facing role representing their employer should at least look the part?

What message is conveyed to a firm’s customer by the sight of a heavily inked, pierced thirty something individual who is there supposedly to represent his corporate employer in dealing with your best business interests?

Tattoos are for life it would seem but are they for business life? Many large employers have policies that do not allow visible tattoos. Depending on the employer’s industry and the type of job, this may make sense.

Does your firm have any ‘inking’ policies in place? Have you experienced any negative customer or staff reaction relating to tattoos either as an employer or as an “inked employee’?

 

www.panaceaadviser.com

Always look on the bright side….

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“Some things in life are bad


They can really make you mad


Other things just make you swear and curse.


When you’re chewing on life’s gristle


Don’t grumble, give a whistle


And this’ll help things turn out for the best…”

So 2013 has arrived, the RDR has become reality and many advisers of all persuasions could have had this song lyric ringing in their ears.

I am not one to look negatives in isolation, as there is always an element of ‘curates egginess’ in most areas that cause division. I am also aware that with the start of a New Year we should also concentrate on the positives by way of our actions, deeds, thoughts and views.

So while whistling this catchy little tune, buried like bad news in the weekend papers, I noted that Hector had bagged a ‘K’.

With a need to start the year in a positive way very many advisers will see this as a ‘signing-off’ kick in the teeth from somebody who has in their eyes done his very best to fix a system that was not entirely broke, to regulate the wrong people in the wrong way for the wrong reason.

The timing, if it had to happen at all, was terrible, it lacked sensitivity toward the industry and his defence, that it was a reward for the hard work of all the FSA staff, and accepted on their behalf by Hector simply beggars belief.

Normally the recipient seeking support by way of such a justification would still be working for the firm or organization at the time of the award, Hector threw in the towel months ago and even had a new job announced prior to the ‘K’ being announced.

I hope at the very least he had waited to order his business cards at Barclays?

There is something quite rotten in this award and I would dearly like to know who suggested this as being a good idea, who carried it forward and why? The guidelines issued by the government state that “the person must still be actively involved in the area they’re nominated”. Does garden leave count?

It is a reward for failure, the failure of the FSA and as some have suggested a reward for not being given the top job at the BoE that he had supposedly been promised. Hector Sants may be a really nice guy but from my experience really nice guys generally do not reach such dizzy heights by being ‘nice’.

They are often surrounded by ranks of well paid ‘blame takers’, possess an Arsene Wenger-like ability to not have seen something when you know they did (as to have not seen it would suggest stupidity) and a skin so thick and fire resistant that you could make space shuttle tiles out of it.

So, some points to ponder:

  • What has Hector actually done to deserve this?
  • What might he have on someone, what is it and who may that person be?
  • Was this part of a hidden agenda agreement to stay on in 2010 and step down in the summer of 2012?
  • Or was he fired but to avoid unpleasantness, a cunning face saving plan like this was hatched?

I am also very concerned that the head an organisation, now being wound up and replaced as it has been seen as a failure in so many ways, should receive such an honour from a clearly hypocritical government that reacted to the taxpaying screaming mob and sacrificially stripped Fred Goodwin of his knighthood for failures that should have been seen and prevented by the very FSA that Sants headed up?

Nobody at the failed FSA should be seeing reward beyond the inflated salary and pension benefits many are in receipt of.

Sants RDR mission, that he chose to abandon, along with other senior officers from the bridge of the Canary Wharf version of the Cost Concordia before port had been reached, may be a success for some and we certainly hope this will extend to all but he should not be rewarded in such an undeserved way.

Here are some key attributes, currently missing I think, that should apply to regulators that could then lead to a ‘gong’:

They can accept failure (recognising their own mistakes)

They have a bias toward action (responding aggressively but positively to a challenge)

They can and do change their minds sometimes (the need to discard old thinking and reprogramme a vision)

They prepare for things to go wrong (regulators are not necessarily optimists)

They’re comfortable with discomfort (they’re willing to accept inconveniences as long as it leads them closer to the important goal)

They’re willing to wait and listen (overnight success is deceptively untrue)

They have heroes (regulators set and meet higher standards when inspired by others)

They have more than passion (success requires drive too)

They understand the true cost of regulation upon those they regulate (and who pays for it)

Perhaps to restore some integrity in a system that seems to reward public sector mediocre achievements or spectacular failure with equal abandon, a decision to refuse to accept it would be welcomed.

The industry mood is not good, indeed 2 petitions have been set up to try and see some common sense prevail.

One is “Withdraw Hector Sants Nomination for Knighthood & Reform The System”

The other is “Public enquiry and resulting prosecution regarding the gross dereliction of duties by Hector Sants and Senior Management at the FSA since 2005”.

With 2013 being a challenging year for the industry remember:

If life seems jolly rotten


There’s something you’ve forgotten


And that’s to laugh and smile and dance and sing.


When you’re feeling in the dumps


Don’t be silly chumps


Just purse your lips and whistle – that’s the thing”.

After all if he cleans up Barclays as he is being tasked to do, a ‘K’ could be considered as a meritorious achievement?