The address of one of my first clients was Phoenix Mills, a common name for a mill in the North of England. Having operated for over 100 years, many textile mills had suffered catastrophes from which they had emerged from the ashes, just like the mythical Phoenix.
However, what was applicable to the wool and cotton industries in years gone by, is no justification for the continued re-emergence of individuals who have damaged their clients and our profession by either recklessly or knowingly disadvantaging their clients. I had thought such behaviour was well and truly behind us, but the recent debate in parliament on this matter demonstrates it is still going on.
On this occasion, the government minister, Robert Jenrick, highlighted that the practice of ‘phoenixing’ can be deeply corrosive to public trust in the system which is progressively passed on to the whole of our economy.
While this is undoubtedly true, what I find so depressing is that after all these years the debate had to take place at all. Surely the Financial Conduct Authority (FCA) has enough data and general information to prevent this?
In the debate, it was claimed that the FCA view was that stopping someone being authorised would deprive them of their livelihood. Given the disgraceful way in which the Retail Distribution Review deprived many hundreds, possibly several thousand, of vastly experienced and honest financial advisers of their authorisation, and therefore their livelihoods, I find this comment appalling.
I look forward to seeing the FCA converting the minister’s comments into actions so that we can finally put an end to phoenixing. Judging from the latest Fos figures, there is no reason to doubt that the average adviser now has a good chance of completing their whole career without a single upheld complaint.
Couple this with the growing demand for our services and you can see why more young people are looking to make their careers in financial services.
In this positive environment, the last thing either we, or the FCA needs, is the farce of phoenixing to continue any longer. Phoenix Mills is one thing, but to allow those who have recklessly damaged their clients to rise from the ashes is quite another.
Ken Davy is chairman of SimplyBiz Group