This in turn causes a reduction in adviser numbers., which means fewer firms must pay ever-increasing liabilities for other firms as they fail.
All this is really not helped by a consumer perception, as noted above, that all financial products and advice present an opportunity for a ‘refund’ many years later if what was suitable at the time of the advice is not seen that way, say, 15 years later due to changed client circumstances, changes in their aims and aspirations that applied at the time of advice. Simply put, because there is no long-stop to limit the adviser's liability.
In the summer of 2018 Panacea ran a FOS survey, in which 83 per cent of respondents felt that FOS complaints process places them in an automatic position of guilty until proven innocent.
It is all well and good suggesting that the polluter pays from a compensation point of view, but the reality is they cannot because the pollution has proved so toxic they just died along with everything else in that murky pond. In other words, the death of the polluter means they can never pay.
A bit of history
In 1970, I started working in the Lloyds marine re-insurance market. My area of expertise was around reinsurance and claims, very specifically on the ‘Torrey Canyon disaster’ of March 1967, as the claims were still being worked on three years later.
As any insurer will tell you, you need to spread the risk base you hold. To do that you need to reinsure to protect yourself as a ‘name’ and your business. This is commonplace with life assurance products.
In the 60s and 70s, Lloyds syndicates (the collective of insurers) operated in what was at the time the biggest open space room in the world opposite the current Lime Street current location. Their individual ‘office space’ was referred to as a ‘booth’, and each booth contained specialist underwriters who took a view on a risk, such as Torrey Canyon, and signed up to insure it.
But in 1967, the supertanker SS Torrey Canyon hit rocks off the coast of Cornwall. What was different about Torrey Canyon was the scale. The ship, one of the new generation of tankers, had been lengthened with the insertion of a new, larger mid-section.
She was carrying, on a single voyage charter, nearly 120,000 tons of crude oil from Kuwait to Milford Haven in South Wales. Being deeply laden, she had to catch the late evening tide for berthing. To save half an hour and avoid a wait of five days, the Italian master took a route to the east instead of the west of the Scilly Isles.