On the drafting of reports 

IMG1563Sometimes, it's helpful to look at other people's published output, in order to help provide insights to the better creation of one's own.  A compelling lesson, reinforced now over many years of experience, is that good writing is facilitated by extensive reading.  The recently published FCA Business Plan for 2019/20 provided plenty of food for thought in that respect.

As FCA publications go, at only 53 pages in length, this one is not an arduous example to interact with.  Even so, it was at times a challenge to understand who the authors were writing for.  It is likely that the answer to this question is simply 'everyone', but the overall effect is a strangely non-specific document, that leaves one scratching one's head over its purpose or relevance.  There is a lesson here:  it is inevitable that our own clients may dismiss or undervalue the strategic importance of the key reports we issue to them, unless we are absolutely clear about who we are writing to.

This kind of 'impactual ambiguity' was further underscored by Andrew Bailey,  the FCA Chairperson's Introduction (pp 4-5).  Although a relatively brief section, the text conveyed a very strong impression that it had been assembled using some form of AI, pre-programmed with regulatory buzzwords.  What was especially striking was the top-heavy focus that the FCA had on itself:  page 4 included 24 instances of the personal pronouns (we, us, our) to describe the regulator.  Page 5 included 28 instances.  By comparison, the use of the words 'consumer' or 'customer' came to 4 and 11 respectively.  This conveys a powerful subliminal message that the FCA is much more interested in its own internal raison d'etre, than it is in the more gritty world of our customers, and the struggles of those professional firms which devote themselves to serving them.

It is conceivable that emphasising that one introductory section does unhelpfully frame one's preconceptions of a document, but actually my perusal of the remaining 47 pages revealed the same sense of disconnect.  There were moments when it was possible to see how the content might relate to real people in the real world (eg. references to the 2017 Assessing Suitability Review on p36), but these were so conspicuously rare that they merely reinforced the overall impression of a culture that is otherworldly, remote and indifferent, and which self-defines by means of its own internal jargon, which few others use.  This is indicative of the top-down mindset of EU regulation:  matters are debated and decided within the enlightened ivory towers, and then they are simply imposed on the rest of us.  The use of a dedicated lexicon is a tool for disempowering those who are the subject of regulation.

Succumbing to this kind of emphasis is less difficult than you might think.  The external, coercive force of compliance, if undirected, can so easily lead to client reports that are impersonal and depend heavily upon huge quantities of generic content.  The FCA is quite correct to draw intermediaries' attention to the dangers of this, whilst, through it's own approach, unwittingly personifying exactly the problem that it castigates.

The challenge with the FCA's Business Plan, therefore, is not that it contains nothing of value, but rather that its design and style makes it a struggle for the reader to discern where that value might lie.  In that respect, it makes no concessions, and seems to be the product of a culture which genuinely believes that its audience must accommodate to it's own values, priorities and terminology, rather than vice-versa.  Whilst I am not trying to argue that the inherent conflicts of interest, when documenting our advice, are easy to manage, somehow IFAs have got to be better than that.  Everything we do, all the time, is about improving our clients' financial situation, and our reports need to reflect that kind of focus.

There are some tasty morsels in the Business Plan...

p3 The revelation that the FCA has agreed to "an independent investigation into the issues raised by the failure of London Capital & Finance".  Where, really, is the mystery?
p5 The utterly naive and unrealistic belief that, in order to protect consumers the FCA must ensure "that they choose the products and services that meet their needs, consumers need to access the right information at the right time."  The substitution of 'information' for 'advice' continues to be the bane of our sector.
p7 The comforting reassurance that the FCA does "not try to prevent the financial failure of firms."  What it likes is the idea of orderly failure, because, apparently, that is a "sign of a market functioning well and does not harm consumers, markets or the UK economy."  And, further to that idea...
p8 In the table headed 'Cross-sector priorities' and 'Operational resilience' there is no mention of the fundamentally broken PII sector and the FCA's catastrophic decision to approve the uplifted FOS compensation levels.
p17 Did you know that the FCA is extending its programme of 'ethical hacking' on regulated firms, using the CBEST system?
p29 A somewhat frivolous thought was prompted by the discovery that the FCA wants "to improve the standards of liquidity management in firms managing funds that invest in illiquid assets, such as property."  I found myself wondering what 'liquid' bricks and mortar property might look like, and whether it might even be habitable?
p34 Flowing out of the 2018 'Retirement Outcomes Review', the FCA is consulting on a new requirement for firms to provide a range of 'investment pathways' to help consumers choose options that meet their needs and objectives in drawdown.  At this point, there is probably a pressing need to bite my own tongue...
p34 And for those involved in the DBTV sector, brace yourselves:  "...in 2019/20 we will start a wide-ranging programme of activity with firms."


Kevin Moss, 18/04/2019