2nd April 2013

Adviser letter of the week

Firms told to ignore most of the individual guidance they may have received from the Financial Services Authority

The FSA smaller rulebook is 1,000 pages long - about the same size as Tolstoy's War and Peace. The full FSA rulebook is even larger at 10,000 pages.  Now we are being told much of this is to be ignored. The real question is was it ever possible to follow and were we ever meant to?

Do the FSA/FCA/PRA really think those regulations could be observed or could it be that regulators actually want these rules broken, could this be the system?   Regulators want power!  The only power a regulator has is the power to impose rules that can then be broken.  When there are not enough breaches, one makes dip into a bottomless pot and produce a breach. Regulators create their own market and justification for their own existence. This is not an anti regulatory stance and I would point out that in spite of all these rules the FSA has still failed every “REAL” test since 2008.

The FSA trick is to declare so many rules that it becomes impossible for advisers to practice without breaking them. Just pass the kind of regulations that can neither be observed nor objectively interpreted and in huge volume. Regulators exist and profit on the breaches and there will always be breaches when you have so many rules! You create your own market. That way you become one of the world’s largest and most invasive regulatory regimes. But it is a false market and of course this has nothing to do with real “regulation” as witnesses by the many FSA failures. So now you understand the system a system where rules are made for you to break! 

We are but mere pawns
In the hands of kings,
We are the mindless spawns,
Just soul–enslaved beings.

We follow those without minds,
Who claim they have divine rights,
As if they are the higher beings,
Yet they and blind and have no seeing.

SIMON MANSELL

Adviser Letter of the Week