Our
Ref: TPO/PB
Friday, 21 April 2006
Mr
Callum McCarthy
Chairman
Financial
Services Authority
25
The North Colonnade
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 sanctuary).
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 |
|
Tel:
01522
537491/3
Fax:
01522
540442
e-mail:
tpo@ohal.org
|
|
Authorised
and Regulated by the Financial Services Authority |
|
Had
enough of working for nothing? YES!!! Visit www.getting-paid.co.uk
for the solution and put an end to all those hours you have donated to
your clients. |
|
Visit
my web sites at www.lifepublications.co.uk,,
www.ohalloran.org.uk , www.terryohalloran.com
, and www.fee-pac.com
|
|
DISCLAIMER:
This email contains proprietary information some, or all, of which may
be legally privileged. It is for the intended recipient only. If an
addressing or transmission error has misdirected this email, please
notify the author by replying to this email. If you are not the
intended recipient you must not use, disclose, distribute, copy,
print, or reply on this email. Email is an informal method of
communication and is subject to possible data corruption. For these
reasons it will normally be inappropriate to rely upon information
contained in an email without obtaining tangible written confirmation
of it. O'Halloran & Co. accepts no responsibility for changes made
to this message after it was sent nor any loss or damage from receipt
or use. |
