The Persistent Elephant 

I try very hard to ignore most of the online news and comment about financial services issues.  This kind of reporting is simply designed to trigger click-thru on websites, and usually highlights matters of fleeting import, which are frequently communicated in a manner which is alarmist, simplistic and short-termist.  And also, life is short - there is insufficient time to acquaint oneself with the sheer volume of online verbiage which rolls onward like a never-ending tide of sewage.

Sometimes, however - perhaps in a moment of weakness - a topic stands out.  You may have seen this piece, on the crisis in the PII market triggered (apparently) by some pronouncement by the FCA.  Stifling a weary groan, I did take a few minutes out from my schedule to read the thing.  Several things stood out...

Firstly, the author of the piece, Damian Fantato.  The surname is a quirky combination of 'Fandango' and 'Potato'.  I'm not sure why that should have intrigued me, but it did.

Secondly, the comments section below the main article:  four posts down, and you'll see one from Gary Heath, of 'Libertatum', this new organisation which proclaims itself as the new Defender of the poor, beleaguered IFA.  I'm not sure where Mr Heath disappeared off to over the several years since he headed up a similar organisation (IFA Association?), with similar aspirations, but I was suddenly overwhelmed by a sense of deja-vu - the payment of yet more subscription fees, yet more bullish pronouncements about dialogue, consultation, and lobbying and then...another long absence?  Truly, this article had caught me at a more cynical ebb than usual.

But, thirdly, there is the substance of the article itself - the 'crisis' in the PII market for financial intermediaries.  This is not new news.  Long before Gary Heath heaved himself out of temporary obscurity, and danced back onto the Strictly Financial ballroom floor, we had been talking with, and writing to the FCA about the nature of the problem, and had made suggestions about its significance.  And here's the point:  this was years ago.  Nobody denied that there was a 'problem'.  If you talk to the PII community, they'll tell you that the problem is largely of the FSA and FCA's making - and, as a firm struggling to obtain acceptable terms for our Members in a market which hadn't merely contracted, but largely imploded, we were well-equipped to (a) comment on the nature of the problem, and (b) identify the causes.

And time passes.  Following my own communications (which were never followed up), the FCA professed itself to be "aware of the issue", but to all intents and purposes that's where the matter remained - parked, in orbit, around one of Jupiter's lesser moons.  Indeed, the interaction with the FCA over the matter was (at the time), characterised by what felt like a weary tetchiness, an impatience to terminate an inconvenient exchange.  There was never any sense that my commentary was welcome - indeed, any exchange of communications was prolonged only so long as to sustain a sense of formal civility, and never to encourage or facilitate a flow of ideas.  I suspect that this is entirely characteristic of the problem:  a regulatory culture which believes so profoundly in the silo it has created for itself, that what (for you and me) would pass for 'normal' dialogue is all-but impossible.  If that kind of diagnosis is correct, then it is entirely logical that the latest 'action' of the FCA is as likely to cause damage to our marketplace, as have the years of inaction.  And it is equally as certain, then, that Libertatum will make precious little difference.

I do not know how anyone can change this, other than by some exertion of Parliament's will.  Sure, where channels of communication exist, they should be utilised - but in the meantime, we seek to influence what we can, and control risk in ways that will hopefully allow us to avoid the scatter-bombs generated by disjointed regulation.  On a more positive note, as a result of ValidPath's continued initiatives on supervision and risk-management, our PII terms have improved on those pertaining in 2016.  We take comfort in the small gains, wherever we can find them.


For no other reason than the fact that it is brilliant, here is a video-sketch about European bureaucracy.  Shame it has subtitles, but otherwise I think you'll enjoy it!

Kevin Moss, 13/01/2017