16:42

Financial Advice

Anyone who has opened a bank account, or done anything that is vaguely financial, will dread doing it again. Aside from the money-laundering tedium and the endless forms about risk profiles, there are disclaimers covering pages of small print that make you lose the will to live. And this is for grown-ups who know what they are doing.

And for what? Still the Madoffs appear. Still the system gets blown apart by regulators, politicians and bankers who, steered by dodgy economic models, allowed us to get into the mess we are in and in the process destroy more pensions and investment nest-eggs than any two-bit swindler or incompetent ever dreamed about. The Financial Services Authority (FSA) must be the best example anywhere of tidying the deckchairs on the Titanic.

But it is worse than that. If you could say that ordinary people – or even more importantly those least able to deal with financial matters – were getting good, impartial advice as a result of all this paperwork there would be at least something to put on the other side of the ledger. Unfortunately, in what must be one of the greatest examples of the law of unintended consequences, this could not be further from what has actually happened. The reality is that the costs imposed on banks and financial advisors to provide this advice for those of small capital and lower incomes has now become so high that they have effectively exited this business leaving a vacuum in its place. So those that most need advise and help are left to swim in the shark-pool on their own.

Will the Coalition do anything to roll back this legacy from Labour? Don’t hold your breath as Parkinson’s law on the triumph of red tape over action and humanity will inevitably come to be proved once more.
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