Believing in our people... 

Douglas Murray, in his excellent 2019 book The Madness of Crowds has an interesting chapter called On Forgiveness.  His argument, based upon pertinent observations from the worlds of politics, media and contemporary culture, is that we have, in the West, lost the capacity to forgive.  He quotes from the writings of Hannah Arendt and a range of others to establish that democratic society only actually works when it allows people a way back from error, or misjudgement or misdemeanours.  And it does seem that this capacity is increasingly lacking within our culture - people are hounded out of positions based upon a single comment, taken out of context, or for something they may have uttered, during the callow foolishness of youth, decades before.  In the real world, folks change their opinions as they become better educated, or as they simply grow up.

At ValidPath, we've adopted a welcoming approach to advisers from a range of backgrounds.  That doesn't mean that we're not picky in our own way.  We only take on people who are ideologically committed to everything that is entailed in the whole culture of independent financial advice.  We're looking for people committed to the disciplines of financial-planning, who are prepared to use the robust tools that we supply in order to deliver the best outcomes for their clients.  And, above all, we're interested in people who understand that professional ethics is not just about a dollop of CPD that you complete, in order to renew your SPS.

There's a big difference between these kinds of realistic, defining criteria and having unreasonable expectations of a kind of unnatural perfection, as if the only people worth bothering about are actually plaster saints, without even the faintest blemish in their past.  We all have a history, of sorts.  Advisers join us from other Networks or advisory firms, and there may be some background to that which needs looking at closely.  Sometimes, there may have been a mistake, or an issue resulting from poor communications with a Principal.  More worryingly, we have been increasingly concerned by the tactics of some advisory firms to demonise advisers who may have misunderstood a new, unworkable, compliance regime, or who fell foul of some unhelpful regulatory novelty, due to no real fault of their own.  It happens, and in our experience, it seems to be happening more frequently.  This is as much a byproduct of the impersonal nature of regulation, which attempts to pigeon-hole individuals into categories, as it is of any real failures evident in the applicants themselves.

And, if there is baggage, what then?  The FCA's Form A contains a section for 'Fitness & Propriety' data that is now longer than the entirety of the original Form A which we used to use when applying on behalf of Members for their Controlled Functions.  You can be sure that with something this voluminous,  any possible mishap in the past is going to be highlighted.  When it is, and it does not actually matter how minor the incident may have been, the entire approval process stops dead in its tracks, to be replaced by an investigation of such a protracted and repetitive nature that the applicant's life can literally be put entirely on hold indefinitely.

In 2014, we got behind an extremely competent and ethical adviser, with the most loyal client-bank I have ever seen, who had been ejected by a big-name Network due to his use of a certain investment fund which the same Network had previously approved for use with retail clients.  The entire authorisations process lasted for fourteen months, took hundreds of man-hours in representations, and eventually went to tribunal, where the individual was almost immediately approved.  Throughout this period he was treated by the regulator as if he were a criminal, and at times it seemed as if the only people who believed in him were his new sponsoring firm, and ValidPath.  When you have lost your business and pretty much everything else, that kind of belief becomes even more important.  At the end of 2014, we took on another, similar case - and that took almost a year of hard work, with a similar kind of dynamic prevailing - the presumption of guilt, based upon unsubstantiated innuendo, rather than any real desire to evaluate the hard facts.  We have become increasingly horrified by a regulatory culture which insouciantly consigns good, albeit imperfect, people to professional oblivion, based more upon presupposition than on a preparedness to actually understand the narrative.  Even the prison system attempts to provide rehabilitation for its offenders, but that kind of outlook is conspicuous by its absence within regulated financial services.

And there have been more, similar cases.  We have just been able to give the good news of approval to an individual where we have fought their case for sixteen months, battling with FCA staff turnover, changes of approach, repeated requests for the same information, and inexplicable delays - all proceeding from a system which ignores the real person, with the real livelihood, dangling by a thread.

At ValidPath, we're far from casual about past misdemeanours, and our commitment to the values outlined in my second paragraph indicates why our members are amongst the highest quality practitioners in the UK.  But there is forgiveness.  There are second-chances.  And there's belief in the individual.

 

Kevin Moss, 02/07/2020