Letters: PI issue is 'critical' to DA companies with longevity

Forced out of the industry

Regarding your article ‘PFS issues FSCS levy call to action’ (Jul 28).

After working as a financial adviser for the past 30 years, the constant hike on FCA fees is driving me out of the industry – to the point that, at 53-years-old I am looking at leaving the industry as a whole. 

It is my clients I worry for. Soon there will be no advice. And watch what happens then with scams; just the faceless rogues roaming around our clients. It is such a sad time.

Name and address supplied

Care homes

Following your article ‘Over-40s face extra tax in bid to fix care crisis’ (Jul 27). 

Care for the elderly needs addressing in the same manner as when the NHS was set up.

Too much reliance is placed on private care homes, who do their best but have to cope with regulations as well as remaining profitable.

In my opinion, a national care system could provide uniformity of training and quality of services. 

The costs could be controlled if the management is obliged to work to a strict but reviewable budget and is not permitted to influence their own pay or benefits. 

Everybody is a potential user of the ‘care for the elderly’ system and so we should all be contributing during our working life, possibly by paying a little extra income tax and capital gains tax (but not on the sale of your principal private residence).

During this pandemic the government has shown it can find money when it wants to, so I’m sure they could find a £1bn to kick start the funding.

Private care homes should still be available for those who want choice and can afford it, but people should not be forced to go private just because they have assets. 

Clive Fox

Retired IFA

FCA needs to step in

Regarding your article ‘Keep FCA fees fair: our campaign launch’ (Jul 24).

The issue with professional indemnity insurance is critical to directly authorised companies who have longevity.

We are a small network with 200 advisers. We have 16 years behind us and we have never had a PII claim paid.

We have seen our PII go from £67,000 to £187,000 in one year. Only one insurer would look at us and terms were agreed with literally hours to go. Having spent the prior four months liaising with the broker – we had no choice – it was pay or close. 

This situation is not conducive to the running of a successful business or long-term business planning. 

We are a profitable whole-of-market mortgage and protection and IFA network. 

We have never borrowed and we have built the business over many years organically as a true family business. 

We call the regulator to step in and manage this situation. 

Otherwise we will have an industry that simply merges and swallows up every small independent business into the goliaths.

That is truly unhealthy as they are, at best, restricted.

Clients and advisers deserve better. 

Name and address supplied

Beaten down by FCA fees 

Regarding your article ‘Business growth foiled after 144 per cent regulatory fee increase’ (Jul 27). 

I am writing to report that I have just received notification that my company’s annual FCA regulatory fee is to increase by 120 per cent, with no prior warning whatsoever. 

This is a cost over which I have no control, despite a small reduction in turnover this year thanks to a global pandemic and a 60 per cent rise in the cost of PI cover. 

Our company is now expected to more than double our funding of the regulator in order to buy them a bigger stick with which to beat us, despite having had not a single complaint in 17 years of trading.

‘Sorry team, shame about the pandemic, great work everybody but no bonuses, no pay rises and no additional staff to help you with your spiralling workload as our regulator is struggling to police the industry for which it is responsible and as one of the last men standing, we all must be punished.’

Matthew Pescott Frost

Matthew Douglas

The right move

The FCA’s new 180-day rule for open-ended property funds, which was announced last week, is clearly the right approach by the FCA.

Retail investors do not understand liquidity issues with respect to property funds (holding physical property). 

When markets are tough and everyone wants cash, property funds usually “lock up” as liquidity is always poor in these situations. 

Hopefully this won’t affect property funds that only hold equities in developers etc – more volatile, but clearly more liquid. 

Bob Symons

Arlo Wealth

FCA not fit for purpose

Well said Alan Steel in his letter in your July 30 issue.

Like Alan, I have written several times to the Securities and Investment Board, the Financial Services Authority and more recently to the FCA, along with many letters to journalists observing a lack of skill in efficient regulatory process.

All three of the above regulatory authorities are one in the same company, merely changing its name but seemingly never the overriding mentality that the adviser can be blamed for all transgressions within financial services provision.

How much better it was in the days of Fimbra. We looked after our own with a small staff and an army of volunteer professionals. 

The professional regulators, like most quangos, continue to seek out reasons why they should continue to exist in a largely political, overbearing, undereducated environment.

The FCA, like its forebears, is not fit for purpose.

Terence P. O’Halloran

Financial Adviser has launched a letter-writing campaign to urge HM Treasury and FCA to reconsider their stance on fees. Send your comments and support to us at fa.letters@ft.com.