'As Financial Conduct Authority managing director Martin Wheatley lays out his vision of how consumers will be protected by the future FCA, I hope he reflects on the root causes of the utter mess savings, investment and protection is in today.
Any objective analysis would surely find the consumer has been awfully served by regulated financial services since 1987. The four statutory objectives of regulation have patently not been achieved these last 25 years.
Rather, the ordinary person’s desire to save and insure has been catastrophically eroded, indebtedness has soared and, unlike 1986, the average person now has no viable plan for remaining independent of the state when their earnings cease through retirement or ill health. The nation is sleepwalking towards personal poverty as a result.
We have all failed, from Chancellors to bank clerks and all points in between but it is those who have had power who must be chiefly to blame and it is their successors that must turn the thing round.
The reason it is the rule-makers not the rule-breakers who are chiefly to blame is because the Treasury and regulator have been unable to resist increasing their responsibilities to the point where no body in a free society can adequately discharge them. Rather than confining themselves to weeding out conmen and fraudsters, they have set out to ensure there is no way a consumer can strike a bad financial services deal.
In that effort, they must always fail but along the way the worthy desire has caused them to gather up all sorts of powers and levy all sorts of charges and taxes. But at every step, as always happens when one overreaches one’s ability, using those has caused unintended consequences far, far worse than the evils they looked to eradicate...'
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