Retail Distribution Review

Further written evidence submitted by Terence P O’Halloran, O’Halloran and Co

SUBJECT: ‘DO AS I SAY RATHER THAN DO AS I DO.’

I appreciate that qualifications are not the be-all and end-all of good practice, although the way the media, the life companies, the Insurance Institute and others have pandered to the FSAs authoritarian promotion of the Retail Distribution Review (RDR), one would think that qualifications were certainly the ‘be-all, and end-all.’

Eleanor Downie is a Fellow of the Chartered Insurance Institute; a level of qualification that once equated to a Masters Degree in insurance and is now relegated to a first year under graduate.  I wonder how many other people with degrees, who have carried out fifty hours of CPD every year, would tolerate such a demotion.  She and I both have to spend a lot of hours going through our "getting up to speed" matrix of questions to satisfy the FSA, for them (the FSA) to ensure that we are suitably qualified to talk to the public.

Here is the rub: 

The people who are saying that we need to be qualified in order to give information to the public not only do not hold relevant qualifications themselves but (see attached letter) deny any responsibility to tell people that they instruct in the art of conducting their professional life, what the professional qualifications are that they, the arbitrators, hold, if any. 

Sandra Collins apparently reflects the view of the senior management, who earn £340,000 plus, for not knowing what they are doing, because, as she states: "It is not a requirement to maintain a record of qualifications since a member of staff has joined the FSA."  She also goes on to state that the qualifications Associate of the Chartered Insurance Institute (A.C.I.I.) or Fellow of the Chartered Insurance Institute (F.C.I.I.) are not required at the FSA.  Let us remind the management that part of the FSAs responsibility (in fact most of it from what one can gather) is to deal with life assurance and pensions contracts.  They don’t need CII qualifications?  Then why do I? 

The Manager in charge of Retail Distribution, Jon Pain, also informed me that I have no need to know his qualifications but that they are something to do with banking.  This is a man that was at the top of the TSB (Trustee Savings Bank) food chain when they were selling the only two unregulated products on the market in order to steal a march on their competition and stitch up as many people as they could before the rules changed. 

You might recall that bankers were also the only organisation, through the Securities and Investment Board, that were NOT subject to fines because the SIB were not empowered to impose fines, whereas the rest of the market, FIMBRA, LAUTRO, IMRO, et al, were busy fining the industry out of existence.

You might not have much ‘truck’ with the Financial Services Industry but I would lay odds that it has earned you a very good living one way or another whether you criticise it, which most of you do, or you praise it, which some of you may. Having spent forty years advising clients I can only think that your ire should be directed now and should have been directed over the last fifteen years, towards the insensitive, money grabbing, bureaucratic emporium that is the Financial Services Authority.

Whether it is scrapped or not bureaucracy will stay, the same people will stay, they will just put another notice board over the door which incidentally, will cost millions of pounds for the facelift and do nothing for the cancer ridden ‘guts’ within this organisation.

I am incensed not only by the contents of the attached letter (and the one from Jon Pain and Hector Sants and many before them) denying that they need appropriate qualifications to do their job (which incidentally appear to be filled from the same recruitment agency, using the same stockpile of names that ignores the same people, like myself, who have applied for eight positions and never got to an interview! (But I forgot they don’t need anybody with my qualifications or experience in the FSA).  The recruiting agencies earn a fortune hiring unqualified individuals and the FSA believes, according to the FSA letter, that, that is the correct way to proceed? 

You have a choice; you can either ignore what is going on at the Financial Services Authority, and its successor organisation, or you can start to put a stop to this slavish indulgence to paper bureaucracy and actually ensure that properly qualified individuals are in charge of regulation as they were when FIMBRA, IMRO and LAUTRO were in place. Regulation worked then.  The consumer was protected then.  It was only Sir Gordon Borrie and the political antics of the Office of Fair Trading stopping the Maximum Commission Agreement coming into force that allowed much of what latterly happened to take place including TSB selling unit trusts and term insurance. 

The banks have a lot to answer for and yet it is bankers or consumerists (whatever they are) who seem to be running ‘the show.’  None of them qualified and all of them hell bent in the supermarketisation of the Financial Services Industry.  Please do something about it.  Stop it before it is too late.  It is your choice and; at least you cannot say you did not know. 

December 2010