Banking Blah (Part II)

 

I blogged (see below - Part I) at my disillusionment at the city regulator’s (Financial Conduct Authority) decision to terminate their review into banking practices.

 

On reflection, my disillusionment expanded to anger and frustration when I reflected and delved a little further.

 

The background bit……

 

In January 2013, the FCA outlawed commission in relation to advice on financial products and banned them. As a consequence, the banking sector en masse scrapped their financial advice divisions……the reason had nothing to do with a lack of demand for the service. It was all about the prospect of no longer earning huge commissions. You see, the banks are just a financial product selling juggernaut. Take commission out of the equation and they’ve very little to peddle.  

 

What has become clear since 2013 is that there aren’t enough advisers to meet consumer demand for financial advice and huge parts of society are now DIY financial advisers. Clearly this has its own dangers.

 

Fast forward to 2016 and the FCA is about to publish the findings of its report into the actions they propose to address the lack of financial advisers in the UK. Coincidentally, at the same time they have terminated their review into banking practices relating to risk, pay and bonuses.

 

We have moved 3 years in a complete circle and the solution to the problem is to return to the problem and allow banks to offer advice for huge commissions rather than allow the general public to make big mistakes at DIY financial advice.    

 

Rather than beat the banks with a stick we have to accept that the powers that be have realised they now need help from the banks as they are not being creative enough to think of an alternative. 3 years, millions spent on investigations on what went wrong, millions spent on researching an alternative solution and the winner is……banks. Right back where we started.  

 

I despair.