The Presses are Rolling 

SectorViewsA few days into the New Year, and already the FCA has published one of those 'overview' surveys of the marketplace which the media loves for its capacity to easily generate alarmist editorial.  I wonder at times if the sole purpose of these publications is to supply easy-to-plagiarise material for journalists, scratching their heads over what on earth to  write, in order to light the blue touch paper to the powder keg of intermediaries' frayed nerves and stratospheric levels of regulation-induced stress.  After all, with MiFID II aggregated costs and charges disclosure to painstakingly work through, we have nothing else to do with our lives, right?

This time, the publication in question is the FCA's 'Sector Views' report, published today (10th January).  I was alerted to it by an article in FTAdviser, entitled 'FCA Slams Expensive Advice'.  It is a masterpiece within the genre, focusing on a tiny part of the overall content of the report, the one element which is calculated to get IFAs blood boiling, when wrenched out of any discernible context.  Helpfully, the FT Adviser piece neither identifies the exact publication from which it derives the inflammatory comments, nor does it supply a page reference to narrow down the scope of one's investigation.  Perhaps I should just have shrugged my shoulders and got on with something else, but my curiosity was piqued.

Eventually, I found the offending content: in Chapter 06 | Retail Investments, on page 53.  Listed under What we found on harm, there is a brief paragraph: 

Poor and expensive services from financial advisers also have the potential to have a detrimental effect on consumers
Consumers can struggle to assess the cost of advice and can overpay for services which they may not need.  High charges at any point in the value chain can reduce consumer returns.

There were, of course, other sources of harm listed, none of which were new or novel, and most of which reiterated the usual litany of unsuitable or expensive products or services.  It struck me afresh that we live out our lives as goldfish within the regulatory goldfish bowl.  We swim, round and round, continually encountering exactly the same aphorisms, couched in exactly identical terms.  Of course "poor and detrimental services" (from any component you care to mention within the supply chain) may have a potentially detrimental effect on the ubiquitous 'consumer'.  Of course (some) consumers "can struggle" to assess costs and they may "overpay for services which they may not need".  And - of course - "high charges" can "reduce consumer returns". 

It beggars belief that someone is actually being paid to produce this unenlightening, anodyne nonsense.  It is even more alarming that the quality of journalism has deteriorated to such an extent that someone with a college education would consider that there is any value whatsoever in simply repeating it, without actually analysing the text on the page in order to discern its essential vacuity.  One might as well reproduce verbatim the embossed pattern on every single sheet of toilet paper on a roll, in the expectation that the reader's senses will be overwhelmed by the profundity of it all.

There actually is some useful content within this report, although you have to dig deep for it.  There are little hints, for instance (pages 50, 58 & 65) that all may not be rosy in the Garden of MiFID, something we had noted the instant that the original regulations were published in preparation for 2018.  Oh, and just to prove that I don't merely have a downer on all financial journalism, there's quite an interesting little piece in FT Adviser on the practical impact of the MiFID II unbundling of research costs on the asset allocation choices within retail investment funds.  Now, that's something I had not immediately thought of.

Kevin Moss, 10/01/2019