From: O'Halloran & Co []
    Sent: 21 April 2006 10:04

    To: O'Halloran & Co

    Subject: Open letter to FSA

    Our Ref: TPO/PB

    Friday, 21 April 2006

    Mr Callum McCarthy


    Financial Services Authority

    25 The North Colonnade

    Canary Wharf


    E14 5HS

    Dear Mr McCarthy

    This is an open letter to you because I believe that your regulatory authority has singularly failed in, certainly three, if not all four of its stated objectives. I read with some interest that your organisation has recently fined Millfields', Paul Tebbit and that your Director of Enforcement, Margaret Cole, stated 'it is vital for effective regulation that information provided to

    the FSA by approved persons and firms is accurate, so that the FSA can make properly informed regulatory judgements'.

    If that is your rule for people external to your organisation, then it has to be one for the internal processes which have created a very expensive and time-consuming last few years for Independent Financial Advisors like my own firm:

    a.       The almost incredulous annihilation of the Professional Indemnity market place by David Kinnear and his cohort (and we notice he has now been promoted to a remote


    b.      The inane payment of compensation to individuals part-way through a term contract. Unheard of in British law until the FSA came on the scene, destroying confidence, trust

    and disturbing Fund Manager's ability to conduct their affairs properly to the detriment of the general public.

    The two areas that I have sited both came about because of uninformed, uneducated, ill-thought through, non-professional decisions made by people totally detached from the Insurance industry in the first instance, and the Life Assurance industry in the second.

    Margaret Cole goes on to say that it was essential that the FSA could rely on Mr Tebbit to provide accurate and reliable information and to advise promptly when aware this did not remain the case.

    John Tiner wrote to me some two years ago, when questioned why PEP and ISA mortgages were not included in the 'review' which, of course, was not 'a review' of endowment

    mortgages and, indeed, pension mortgages. Why then did Mr Tiner not provide accurate and reliable information? Why has David Kenmir stood on public platforms and delivered information, which he patently knows is inaccurate and why did he not act promptly when the PI Insurance muddle became a catastrophe?

    The Financial Services Authority has cost my company tens of thousands of pounds unnecessarily over the last few years and you can multiply my small practice by thousands around the country. 

    What is the purpose of this letter? 

    1)   I want to know what you are going to do to change the culture of the FSA and put right these travesties. Rather than keep fining people like Paul Tebbit who may, or may not be

    guilty of whatever you charged him with, recognise the truth of the old Biblical story regarding the Darnell and the Wheat:

    The servant came in and said to his Master, 'Master, you must have bought some bad seed because your Wheat field is full of Darnell' (a weed). 'No', he said, 'I bought good, sound

    seed but one of my neighbours must have sown the Darnell in amongst it to lessen my crop', was the Master’s reply. The Servant then retorted, 'Shall we go and pull the Darnell

    from the field, so that the Wheat can grow?', and wisely, the Master said, 'No. If you try to pull the Darnell from the field, you will trample the Wheat crop'.

    Mr McCarthy, you and your colleagues are trampling the 'Wheat' crop.

    The interesting thing about the Biblical story is that Darnell is no ordinary weed. If you look it up on the internet, you will find that it is a weed that looks exactly like Wheat. It is very hard to tell the difference.

    The conclusion of the story was that the Master said, 'No, wait until the Wheat is ripe and then we will harvest the Wheat and the Darnell, separate the Darnell from the Wheat, put the Wheat into our storage bins and then burn the Darnell'.

    I do believe that the Bible has some very profound stories. You would do well to promulgate this story among your Senior Managers.

    2)   The PI market collapsed because you did something that was unlawful and against the public's best interest. You introduced retrospective advice, based on hindsight.

    The FSA has done its absolute damndest to undermine the With Profits principal and Endowment mortgages by promoting the payment of compensation part-way through a contract

    to people who are taking the money and going on holiday and buying cars with it.

    That is hardly 'placing people in the same position as they would have been had they had a repayment mortgage' – your stated objective. 

    Meanwhile, there are banks out there interfering with client confidentiality in order to make investments, in your depolarised world; which is another mistake borne out of improper surveying practice.

    I think you need to stop the practice.

    Perhaps we can look forward to those IFAs who have been incorrectly accused and been forced incorrectly to pay compensation and suffered the ignominy of totally worthless PI

    Insurance because the excesses are so high, to receive compensation from the bloated salaries and pension rights of your Managers who are responsible for this fiasco. They are not immune from action.

    I am a Chartered Financial Planner, who has spent years, 35 of them, serving my public and this morning, a 77-year old woman telephoned my office, upset and alarmed, because a bank had been snooping into her private affairs and was questioning a cheque that she made as an investment. She was terrified.

    You and your ragged organisation have managed to fail every one of your stated objectives because now, not even our bank accounts are safe, confidential or trustworthy. What an indictment you have to live with.

    Now please, do something positive about it.  QUICKLY.

    Yours faithfully

    Terence P O'Halloran BSc FCII AIFP

    Chartered Insurance Practitioner


    St James Terrace
    84 & 88 Newland
    LN1 1YA

    Tel: 01522 537491/3                                     

     Fax: 01522 540442                                   


    Authorised and Regulated by the Financial Services Authority

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