I imagine any gamekeeper adopting such a philosophy would get short shrift from Lord Grantham, and rightly so.
Clearly this would be a ridiculous state of affairs and yet, in essence, this is what the Financial Conduct Authority seems to be saying by stating that it is not responsible for banning unsuitable products.
This comes after the FCA’s Debbie Gupta was recently reported to have said that unsuitable investments are, by definition, a subjective judgment.
Far too often the regulator comes along too late, precisely because it has waited until the damage has been done before acting
I disagree, and would ask that if it is not the job of the regulator to ban unsuitable products, then whose is it?
Far too often the regulator comes along too late, precisely because it has waited until the damage has been done before acting.
It is not rocket science to identify products that are high risk and have no place in most people’s plans.
If the FCA’s argument is that they cannot prevent high-risk products being manufactured, then at least it should be possible for the regulator to identify them and ensure they can only be bought on a non-advised basis.
Behaving like camp followers of the past, and turning up after the battle to count the dead and bayonet the wounded is simply not good enough.
Clearly, just because a product has a niche market does not on its own make it high risk.
Indeed many niche products are designed to deliberately meet the needs of a limited market, and the vast majority of advisers regularly use them correctly for their proper purpose.
Most importantly, under the Mifid rules, providers now have a responsibility to identify the right markets for their products and ensure that they are being used appropriately.
The problem comes from companies who sell potentially toxic products to customers who do not understand the risks.
By making such products only available on a non-advised basis, the regulator would be saving the advisers and providers who have to fund the Financial Services Compensation Scheme, an absolute fortune.
They say turkeys do not vote for Christmas but, if the gamekeeper limits the damage the foxes can do, there will be a lot of happy chickens.
Ken Davy is chairman of the SimplyBiz Group