Wednesday, 6 November 2013

After Action Report from Planet Zog

Some of you will know that my day job is running - and working in - a small retail financial advice business.  You may also know that I am quite outspoken about the unremitting failure of bureaucatic regulationism and that I make a lot of comments about this in the FS trade press and elsewhere.

For these sins I was invited to a round table meeting with two functionaries of the FCA (the Financial Catastrophe Authority) seven members of my peer group and two representatives of one of our trade bodies. The meeting was asked for by the FCA apparatchiks to 'listen to' our 'concerns' about the FCA rules and to try and 'accommodate' our requests.

Well, in short, it was a farce. My peer group banged on about all the mad detail of the FCA rulebook under which we labour, failing to realise that its purpose is a trap, not a set of workable rules. The two bods from big retail advisory businesses were, unsurprisingly, in lots of ways as bureaucatic as the FCA bods, but hey, what do you expect. Crony socialism/capitalism is the new black these days.

In any event were asked to go round the table giving our names and two to three minutes setting out any pet gripes. Well, you can guess the sort of stuff: too much bureaucracy, too much uncertainty, specialist gripes by the Big Companies and the 'compliance' officers present and so on and on it went.  My stated purpose in my turn that I was here to listen and on behalf of my clients.

The two FCA bods were utter weasels.  Bod A, an ex (failed?) lawyer and now career regulationist functionary was absolutely an expert.  An expert at dissembling and evasion.  He made some comment about their fees and I asked him who he thought paid him.  Silence, for fully ten seconds as he tried not to answer.  Eventually ' We are get our revenue by a levy on the industry' he mumbled.  'And where do we get our money from?' I asked.  Another extended silience - eventually 'From the consumer' (note the evasion of the use of the client word). So I said, 'Then really where do your levies come from?  Silence. No reply. 'So you admit you are paid by our clients then?'  Silence.  The chairman intervenes ' 'Shall we move on'?'

Bod B then starts banging on about stuff.  'Well, my research indicates what we can allow you to do' (!).  Clearly he's been reading 1984 and thinks it is a manual, not a caution.

They brought up their use of 'behavioural economics' to guide their 'decision making'.  By this time I was getting mighty fed up and my guard fell and I pointed out that economically 'behavourial economics', was, speaking technically, bollocks. Weasel Bod A challenged me (and I missed read the opportunity - I was getting up his nose) and I corrected his understanding of economics.  (In any event if BE is any use it can equally be applied to the FCA - which of course it isn't).

Things go on a bit.  Gripes are made.  Notes are taken.  I keep quiet.  My turn.  'Quite frankly I agree with all the stuff set out by my colleagues, but what the Hell.  I am in business.  I just deal with all this stuff.  Over here I look at every client situation and ask 'what is the best I can do for this person'? and then over there I tick all your boxes.  And since you are saying that our prices are to high you should know that 50% of our fees go out of the door in tax and another upwards of 20% go out in regulatory imprests and dead weight costs.  That is, we charge the client a quid, you get upwards of 70p we get 30p.  We are not the cost problem. You are'.  Silence from the Chief Weasel.

Next question. Chief Weasel.  'If you could ask for one change at the FCA what would it be?'  Usual stuff from round the table.  My turn. 'The return of the Rule of Law'. Silence. I let the silence hang.  Staring match. No reply. 

Someone comments that the Financial Ombudsman Service is a problem.  'We do not supervise them' quoth Chief Weasel'.  A colleague ' Yes you do. You wrote their rulebook'.  Silence and diversion onto the the next point.

And on and on it goes.

As a lesson in the absolute arrogance of these utterly unaccountable bureaucrats it could not be bettered.  But really, utterly pointless.  They have no idea what they are doing and will carry on doing that until it all goes tits up.

Chairman. 'Any further comments?'.  Silence.  Me. (to Chief Weasel) 'Yes.  I'll make you a bet. Now.  This is all going to go horribly wrong.  Central planning always fails. will you take the bet?'  Silence.


I forgot one real gem from The Chief Weasel.

"There is good and bad competition.  And we will decide which is which".  That's a synopsis. He indulged in the most egregious logic chopping you could imagine.


Mark Wadsworth said...

It will only go wrong because the regulator is not big and intrusive enough, the checklists and form filling are not rigorous enough and because the guidance is not detailed enough. There's nothing another layer of bureaucracy can't sort out :-)

Bayard said...

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it."(Upton Sinclair)

Lola said...

B. I had forgotten that one. I shall make a note for ext time...

Steven_L said...

I was very impressed with the FCA bloke who came to tell us about their takeover of consumer credit regulation. I don't know how much media training he had received, but his deflection / spin skills were lead story on the 6 'o' clock news standard.