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"We can regulate the paperwork post-sale but it's difficult to regulate thinking"

"The outcome is lots of very compliant-atrocious advice"

Having made a statement some months ago about unconscious competence, I have spent the last few weeks observing the comments of the industry as a whole to ascertain a general consent.

While writing for consumer journals and columns I see many different queries coming in from readers and there is a remarkable consistency - a consistency that good IFA's all over the UK will just keep paying for.

On the one hand I hear commentators stating that it is the rare few who are poor while on the other hand I see the facts. Just like the three year old jumping up and down on his dad's car seat going "broom broom" believes he is driving the car, many of these advisers actually believe they are providing advice.

A problem we have in our industry is that we can regulate the paperwork post-sale but it is difficult to regulate thinking unless you raise the barrier to entry so that three year olds are not allowed access to cars let alone to drive at all. The outcome is lots of very compliant atrocious advice.

Let me share with you a classic conversation that used to surprise me but does not anymore. The IFA sits in front of me in a bar and says it is his role to visit clients each five years and move their bonds to the new best performing one. Asked if he thought that was treating customers fairly he looks at me like I am a politician.

He does not take trail commission and puts the reason for that clearly at the foot of an article he has read which says the FSA will be looking to stop advisers from taking it. It was probably next to one that says many financial advisers are useless.

My blame, however, lies with the bonus culture that Mervyn King, governor of the Bank of England, referred to. How many broker-consultants at building societies, banks and fund groups have seen activity on an account they are dealing with that they believed to be unacceptable.

How many turned a blind eye because they knew it would affect their bonus. How many broker-consultants know that their better "sales accounts" are just churners - a with profit bond followed by a property fund, then a change into a fund of hedge funds, each attracting a healthy seven or eight per cent commission? It seems an unfair journey for customers and a healthy one for the adviser.

In my conversations with broker-consultants they openly talk about not trusting the vast majority of advisers so why are they not all whistle blown.

It is actually for the adviser and customers' benefit that these firms are taken to the FSA vet and put down, and the industry can move on without these constant strains.

A high profile individual locally has just been thumped by his firm and deregistered, yet everyone locally knew what he was up to for some time, except, it seems, his own firm, the firm they are registered through, and those he was doing business with. Either they are blind, have selective eyesight or just do not know what fraud means, but none are a great outcome.

Tighter and stiffer regulation is required to ensure these people are taken out of the system and the fines should match to ensure that once again the clean professional IFA does not get the bill through the inevitable financial services compensation scheme levy.

Peter McGahan is managing director of Worldwide Financial Planning