Separating the Wheatley from the chaff

Martin Wheatley is to head the FCA.

On Wednesday Martin Wheatley, who will head up the FCA (the new incarnation of the FSA), made a stirring speech championing the consumer.  At last there appears to be someone with the guts to challenge the "weeds" that have propagated at the FSA.  The biblical reference "to separate the wheat from the chaff" from Matthew 3, means to separate things of value from things of no value; and the serial failings of the FSA has proven they have no value when it comes to consumer protection.

But let us not rejoice just yet, for while Mr Wheatley's speech is excellent news, the FCA will be judged on its actions, not just its words. We have now seen years of procrastination and dithering from various regulators, including the IMA and the FSA and we urgently need statutory guidelines to ensure full transparency that will lead to vastly improved investor and saver outcomes.

Whilst his comments suggest he intends to show strong leadership and tackle hidden charges and fund fund fees at the FCA, Martin Wheatley is not going to have an easy job and is going to be heavily interventionist if he is to succeed. The industry is only just beginning to step reluctantly in the direction of giving greater transparency.  There are very mixed messages still circulating in the industry, causing yet more confusion for savers and investors. The most recent example being the IMA’s Annual Asset Management Report, issued this month, which stated that “investment clients are paying fund fees of a fraction over 0.3 per cent across the board”. This completely ludicrous claim puts efforts to regain consumer trust in financial products and the financial services sector back several years.

In my view, strong, clear leadership, a single industry standard on transparency of fees and charging, and a standardised method of reporting all costs and fees via one single total cost of investing number are essential steps to ensure consumers know the full price they will pay for investment products prior to purchase. 

However we also need to address other anti-consumer practices (which we have been highlighted by the True and Fair Campaign) including the failure to give full disclosure to consumers on where their money is invested; closet index tracking by active funds; fund mislabelling and mis-classification and conflicts of interest in stock lending.

There is much to do to improve the shockingly low standards of investor and saver protection in the UK.  Change is long overdue and must come soon, otherwise we risk further alienating savers and investors and damaging the financial services industry, and the UK economy. Martin Wheatley’s comments are extremely welcomed but we urge stakeholders to keep a watchful eye out for early action from the FCA to honour this pledge to give genuine transparency.

Gina Miller is the founding partner of SCM Private LLP and spearhead of the True and Fair Campaign. www.trueandfaircampaign.com

 

Martin Wheatley. Photograph: Getty Images

Gina Miller is the founding partner of SCM Private LLP and spearhead of the True and Fair Campaign. www.trueandfaircampaign.com

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We're running out of time to stop a hard Brexit - and the consequences are terrifying

Liam Fox has nothing to say and Labour has thrown the towel in. 

Another day goes past, and still we’re no clearer to finding out what Brexit really means. Today secretary of state for international trade, Liam Fox, was expected to use a speech to the World Trade Organisation to announce that the UK is on course to leave the EU’s single market, as reported earlier this week. But in a humiliating climb-down, he ended up saying very little at all except for vague platitudes about the UK being in favour of free trade.

At a moment when the business community is desperate for details about our future trading arrangements, the International Trade Secretary is saying one thing to the papers and another to our economic partners abroad. Not content with insulting British businesses by calling them fat and lazy, it seems Fox now wants to confuse them as well.

The Tory Government’s failure to spell out what Brexit really means is deeply damaging for our economy, jobs and global reputation. British industry is crying out for direction and for certainty about what lies ahead. Manufacturers and small businesses who rely on trade with Europe want to know whether Britain’s membership of the single market will be preserved. EU citizens living in Britain and all the UK nationals living in Europe want to know whether their right to free movement will be secured. But instead we have endless dithering from Theresa May and bitter divisions between the leading Brexiteers.

Meanwhile the Labour party appears to have thrown in the towel on Europe. This week, Labour chose not to even debate Brexit at their conference, while John McDonnell appeared to confirm he will not fight for Britain’s membership of the single market. And the re-election of Jeremy Corbyn, who hardly lifted a finger to keep us in Europe during the referendum, confirms the party is not set to change course any time soon.

That is not good enough. It’s clear a hard Brexit would hit the most deprived parts of Britain the hardest, decimating manufacturing in sectors like the car industry on which so many skilled jobs rely. The approach of the diehard eurosceptics would mean years of damaging uncertainty and barriers to trade with our biggest trading partners. While the likes of Liam Fox and boris Johnson would be busy travelling the world cobbling together trade deals from scratch, it would be communities back home who pay the price.

We are running out of time to stop a hard Brexit. Britain needs a strong, united opposition to this Tory Brexit Government, one that will fight for our membership of the single market and the jobs that depend on it. If Labour doesn’t fill this gap, the Liberal Democrats will.

Tim Farron is leader of the Liberal Democrats.