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The Financial Services
Authority (FSA) is now the main financial regulatory body in the UK. For
example, they set and enforce the Listing Rules
and also police market conduct (ie. try to prevent market abuse by traders).
In addition they are
the main regulatory body for collective investment vehicles and for such
bodies as banks, insurance companies and other fund managers. So if you
think you have been sold a pup, the FSA is the body to which you should
complain. See the FSA web site
at
www.fsa.gov.uk for more
information. The FSA also has investigatory powers so it can examine new
abuses of financial probity that seem to arise all the time (the more the
markets become regulated, the cleverer people become to find other ways to
part suckers from their money).
Is the FSA effective at
protecting private investors from unscrupulous professionals? Probably not.
For example, when the recent split capital investment trust debacle
occurred, the FSA decreed that investors who had previous experience of
stock market investment would not be eligible for compensation (presumably
on the basis that they should have known better, even though many
professionals fell into the same trap).
Also there is as yet no
clear definition of "misselling", and the heavy regulation (and expensive
overheads) now associated with financial advice is leading to a strong
emphasis on the sale of financial products where minimal advice is supplied.
Even the Sandler commission recognized that is impossible to sell products
that are both cheap (i.e. with low commissions) and yet with good advice.
The FSA is therefore unlikely to see any reduction in it's workload in
the near future, and private investors are advised as always to rely on
their own due diligence, experience and knowledge to a large extent.
In 2007, the FSA conducted
a review of "Retail Distribution". Our response to the public consultation
is given in the following two documents:
CoverLetter and
Answers. In addition we issued
the following press release:
Press051_Retail_Distribution_Review. Our comments on the interim report
from this review are present in:
Retail_Distribution_Interim_Report_Response. A complementary document is our
submission to the contemporaneous "Thoresen Review of Generic Financial
Advice" which can be seen at: Thoresen_Review. |
