Everything's preloaded 

In 2009, the world-famous conductor and pianist, Daniel Barenboim, published Everything is Connected, his celebration of the value and power of music as a tool for connecting divided and disparate peoples, and as a metaphor for a kind of higher-level, unifying force in the world.  It's an intriguing idea, not without its attractions (especially given his local application in Israel and Gaza), and given its political implications, sparked a range of responses, depending upon the ideological commitment of the reader.  Content and presuppositions of a nakedly political nature are rarely going to unify the intended audience, and this is probably why, historically, we have sought to marginalise such perspectives within certain contexts.

At ValidPath, we're a broad church, which means we avoid explicitly political or ideological comment - a stance which is not always easy to maintain, given that regulation is a byproduct of a particular kind of ideology.  And, with the FCA's latest publications that we have recently reviewed, the political component, hitherto more detectable by inference than anything else, has risen to the surface of the pond.  This observation holds true for Consultation Paper CP21/13 ('A new Consumer Duty'), but much more so for Discussion Paper DP21/2 ('Diversity and inclusion in the financial sector - working together to drive change').

ValidPath Members can read our introduction to CP21/13 here, and will be encouraged to learn that much of it is relatively uncontroversial - indeed, it reflects the guidance we have been consistently issuing for many years.  Since it is going be a catalyst for change, we recommend that you take steps to familiarise yourself with the FCA's views, because - in some shape or another - this is going to become reality.  DP21/2 (published this July) is another matter.  It bulges with all the hippest buzzwords, and whilst it nurtures aspirations that few would dissent from, it is driven by ideology rather than evidence or by clearly identified objectives.  Whilst it is no surprise that Critical Theory is now getting rolled out within the financial services marketplace, given its aggressive promulgation elsewhere, we need to be clear that this is very much a theoretical construct, a product of a very particular kind of political ideology.

As with any document of this nature, there's plenty there to agree with.  Who could possibly be against 'inclusion'?  That's a good thing, right?  And, given our increasingly diverse culture, what could be so bad about ensuring that our own firms are representative of the customers we seek to serve?  Those big-picture values are fine, and - at that level - uncontroversial.  It's when you look at the detail of the DP, that things begin to look concerning - and there is plenty here which should concern the dedicated financial-planner, who is already seeking the best for his or her clients.  The emphasis on rapid progress, without defining (a) the nature of the gap or (b) the direction of travel, feeds into a culture of grievance and unspecific guilt that somehow we are not 'there' yet.  The repeated reference to 'diversity' as a kind of mantra that will fix all of our problems is almost cultic in its style.  The denigration of what the FCA calls 'groupthink' may sound plausible until one recalls that the FCA itself is an exponent of a particular kind of 'groupthink', one that quite evidently is not working.  Intermediaries should rightly be concerned about the apparently inexhaustible appetite for more reporting of data, which is inevitably going to push costs ever-higher.  There is an unhealthy dependence upon assumptions which are never questioned, and are never evidenced:  this is representative of how ideology seeks to deal with reality - by replacing it.

If you have taken the trouble to familiarise yourself with Critical Theory and the postmodern ideology that gave rise to it, you will already be aware of the highly dismissive stance it takes in relation to 'science' and empiricism, which are generally treated as tools of oppression.  It should go without saying that professional advisers would nurture a high regard for 'scientific' models of investing, as well as empirical methods for balancing risk and reward, or for computing effective financial-planning strategies.  The same really ought to be the case at a regulatory level, and practitioners should not be forced to accept questionable political ideas in order to do their job.

Kevin Moss, 03/08/2021