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PIMS - Arcadia 2009
A week in politics, they say, is a long time. Three days at PIMS is a similar experience, spent anchored between Jersey and Guernsey with the industry great and good.
As a "PIMS" first timer, I was not sure what to expect and upon boarding found that my life from boarding Arcadia on Wednesday evening to getting off at 6.30am on Saturday morning, had been organised with meticulous detail.
The organisers of the event- Richmond Events- carry out a great logistics job. Appointments are arranged for you with those that want to see you or vice versa, mostly in 30 minute slots, from 7.45am onwards through until 7.00pm. Many providers both large and small were very impressed by what PanaceaIFA has achieved to date and what it is looking to achieve in the coming months. It is quite clear that for product providers, large and small, the much neglected world of the small directly regulated IFA is indeed becoming a sought after one to enter and explore and these firm now realise that PanaceaIFA is the route into it.
There were many fine speaker sessions on board and for those who have not attended PIMS, please see at the end of this article a list of PDFs from the keynote speakers that I am sure will be of interest.
A continuing cause of concern and a focus of some discussion throughout the event was the forthcoming RDR paper from the FSA, the role and regulation of banks, the FOS and the models that advisers will need to adopt or adapt to see the next decade through.
There is much RDR speculation and all will become very much clearer soon. We know that regulation, and in particular retro regulation is a major concern. Many delegates were from smaller IFA firms and needless to say for them, the FSA/FOS relationship was high on many agendas.
There was some very useful intelligence to be gathered here and some messages came through that will give considerable food for thought.
The whole regulatory regime as it stands appears to be set up to favour banks as you will be only too well aware. By far the biggest miss-selling offenders within FOS jurisdiction are the banks. IFAs account for 3% of all complaints with 30% of these found in favour of the complainant. These figures should suggest to any regulator that either the banks are regulated separately or IFAs are. But, the cost of regulation and regulating banks in particular should not fall on the shoulders of a distribution and advice channel that accounts for less that 1% of complaints.
Although any fines against banks may seem high in cash terms they are rather like fining a Premiership footballer a week’s wages. Fines are surely ineffective for these types of organisation and perhaps a suspension of permissions for a month or two in the case continued extreme rule breaches and failures would/ could be more appropriate, a form of three match ban!!
An interesting conversation was had with Chris Cummings who is of the view that IFAs should be pleased with most aspects of the RDR but as always we would advise that the devil will be in the detail. He also came up with some interesting view on the FOS and the 15 year longstop.
It would appear that late last year the FSA was relaxed about accepting the appropriateness of this legal anomaly that the FOS has unfairly fought so long to retain. But, the FOS and its consumer panel in particular is hell bent on fighting this and that any decision will only come from legal challenges or political intervention.
Regarding the hot potato of considering previous ombudsman scheme rules as per the transitional rule provision, the FOS stance on this is that the key word is “consider” and the scenario for this I that they look at case, tick the “consider” box then move on to jurisdiction thus demonstrating that they have applied the word” consider” in an appropriate fashion. We would strongly advise those IFAs who wish to see “consideration” of previous ombudsman scheme rule demonstrably applied to ask for documentary evidence to illustrate how the word “consider” has been actually been applied.
Chris Cummings advised that the FOS do have a special unit to deal with IFA complaints with staff that are supposedly more in tune with those that they sit in judgement upon and as a result it would appear that more IFAs are now asking one to one hearings with the FOS and getting them. We would advise all IFAs to request one to one hearings as this is the only way that adjudicators can have the veil lifted that seems to obscure the fact that many manufactured complaints enter a system when they should not.
It would appear to be the view of Walter Merricks that for IFAs caught out by the 15 year longstop, it is their own fault for not being incorporated. This. would suggest that for any small incorporated firm that is facing ruin due to a raft of “stale claims”, the acceptable ultimate act of preservation option is to close down and pass the claim on to the FSCS so someone, anyone, even you will pick up the tab by way of increased levies.
So that is OK then! Except that FSCS do appear to consider the 15 year longstop in deliberating over what may be stale claims. Welcome to the Magic Roundabout.
PIMS is a great event and if you are invited to go, grab the opportunity. They say that people who are like each other like each other. Well, at PIMS there are a whole lot of people who all have the same focus, aims and aspirations and want to see a more professional and well resourced financial services world evolve for the benefit of all.
Speaker Presentations
Article last updated: Jun 24, 2009
Derek Bradley, CEO
Sarah Paul, Marketing Director
James Bradley, Head of e-Relationships
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