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Will tougher protection restore trust in the financial services industry?

08:49 UK time, Friday, 12 March 2010

The head of the Financial Services Authority has announced new measures to protect customers taking out mortgages, pensions and investments. Will this make you feel safer buying these products?

Chief Executive Hector Sants wants the regulator to stop risky products being sold, rather than just offering compensation to consumers after the damage has been done.

There have been a number of mis-selling scandals in recent years, involving products such as personal pensions and endowment policies.

Would knowing a product has been approved by the FSA give you peace of mind? Do you think this change in the FSA's role will restore trust in the financial services industry? Or do you think more needs to be done to protect consumers? Were you the victim of mis-selling?

This debate has now been closed. Thank you for your comments.


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  • Comment number 1.

    What we need in the financial services is control of risk. Salesman will lend money (to get big bonuses) to anyone they can, their bosses get their bonus on the back of the salesmens bonus. We must stop people like Sir Fred the Shred lending £2500 MILLION to ONE RUSSIAN (he lost the lot)

    Lets have a system of independent financial assessors who will mark down the bank/financial organisations rating if any one of the following occur:

    1. Payment of any bonuses when the organisation makes a loss.
    2. Bank/financial organisation does not have open access to its accounts.
    3. Any excessive lending to one organisation (e.g. £100M investment in Bulgarian industrial property - this actually happened).
    4. Lending in any scheme that has a high risk potential (Sub-prime mortgages - I ask you lending money to people with no jobs!).
    5. A high proportion of incestious trading, (investing in other financial organisations and vica versa).

    The assesser firms would be licenced by the Bank of England, cannot sell any other service, the financial organisations pay for this service from stamp duty on their dealings etc.

    Reduce risk, this will not stop good business practice in sound investment opportunities. Whiz-kid dealers who dream of nothing but where there next ferrari is comming from will be shown the door.

  • Comment number 2.

    It is always better to treat the cause rather than the symptom, so yes.

  • Comment number 3.

    I don't think anything anyone can do would restore trust in the financial services industry. Their past, present and most likely future despicable behavior is unforgivable in a decent society.

  • Comment number 4.

    Tougher protection and regulation should have been brought in years ago. The consequences today is that we have an economy reliant on personal debt, with Government dept amounting to at least £144,000 per household. Tough times ahead for sure, which will not be solved by yet more dept. Shame we cannot roll back the clock…

  • Comment number 5.

    There are a number of sayings that come to mind.
    One contains the words Horse, Stable and Bolted.

    Would knowing a product has been approved
    by the FSA give you peace of mind?

    Er ... No!

  • Comment number 6.

    Given the FSA's track record? That's a laugh.

    As always, read the small print, seek advice and be aware that whatever blandisments the financial institutions wave around they are in business to make money for themselves, not for you!

    Getting the Plain English people to supervise their documentation would be more use, anyway.

  • Comment number 7.

    The truth is that many financial service products are not really worth buying. For example, customers are often persuaded to buy insurance that is very poor value for money and maybe hardly necessary. Mis-selling is a matter of degree and is prevalent in the financial services industry because few customers understand what they are buying.

    The FSA is unlikely to be able to do more than deal with the most outrageous examples of mis-selling.

  • Comment number 8.

    Having fallen for both the private pension and the endowment policy scams, I will never let a "financial adviser" near me again. Trust the FSA to protect us? On their past record, no chance.

  • Comment number 9.

    I have quite recently been the victim of mis-selling.

    I reported the mis-selling to the FSA, and they weren't in the least bit interested, even though the product I was mis-sold was regulated by the FSA. The reply I got said "Unfortunately we cannot intervene in or investigate complaints against the firms we regulate on behalf of other firms or the public".

    So I would certainly agree that tougher regulation is needed. Seriously, what on earth is the point of the FSA if they can't investigate complaints?

  • Comment number 10.

    Regulations can always be gotten around. Until bankers show us that they have changed their mantra of greed they will be rightly regarded as the benthic entities that they are.

  • Comment number 11.

    "There have been a number of mis-selling scandals in recent years, involving products such as personal pensions and endowment policies."
    About which the FSA did too little, too late. Had the FSA done it's job and insisted on banks and building socities not lending more than 3 years' salary, the country wouldn't be in anywhere near the economic mess it is now.

  • Comment number 12.

    We were promised global changes to the banking system - where are they?

    How can you trust an organisation that overcharges when you go a few pounds overdrawn and yet underpays when you are in credit?

    How can you trust a product where it is the commission that is attractive to the seller and not value for money for the buyer?

    Until our financial sector is brought to heel there will be no trust and I cannot see the FSA doing anything different to what the Government has done. That amounts to nothing other than pouring good money after bad.

  • Comment number 13.

    "Do you think this change in the FSA's role will restore trust in the financial services industry"

    No but seeing some of the people responsible for the entire mess being actually held accountable might. Why do people think that TRUST can be restored so easily?! Trust has to be earned it is not a right.

  • Comment number 14.

    Why on earth would anyone buy mortgages, pensions and investment endorsed by the FSA.
    The FSA hardy has a good track record, they totally failed to spot or stop the banking economic meltdown, Northern Rock, Madoff etc.
    This sounds like the FSA have seen an opportunity to earn a buck on the back of people purchasing financial products.

  • Comment number 15.

    Inevitable ALL 'ordinary' people will be reliant on State 'dole'; why delay the-obvious?
    Local-authority personnel expecting 'final-salary' from future TAXPAYERS will be disappointed. Absence of 'Welfare-Bucket' is dangerous; medication, care-costs... are STILL unfunded. Limited manufacturing means poor foreign-currency earnings.
    Solid 'jobs-for-life' Woolworths... employers 'disappear' most EVERY-MONTH.
    Millions of street-cleaners, paid-for by the TAXPAYER, generate zero foreign-currency income.
    Pointless piling-taxes on those without cash income-&-savings, so those with cash, assets... in the cross-hairs.
    Enron-style accounting with off-book liabilities [REAL Terrabyte-plus broadband, renewable-power...] eye-wateringly expensive; currently-paying 10-fold electricity-prices over previous-decade, no-reason to believe electricity, gas, petrol... will get-&-stay cheaper. UK£5 at elementary-school bought ALL the food family-of-eight 1970; todays PENSIONERS, mostly, expected the-little they-saved would pay-for 'little-luxuries'.

  • Comment number 16.

    "The F.S.A is a toothless usless Quango, Who have not the money or man power to do they job properly, The only people who they help are the crooks and cheats who milk and con the public. They are on the side of big business and the banks' They are a waste of time unless you like to fill in forms? with no action taken to help any one please scrap them as soon as possible, and replace them with a proper consumer indepented company who will and can help the public.

  • Comment number 17.

    If this gets us back to the days when, if you wanted a loan or a mortgage, you sat down with your bank or building society manager and verified to both your satisfactions that you could truly afford it, then I applaud this move.

    I have one or two friends who work in high street banks and they are fed up with the pressure from above to sell various financial products and ignore inconvenient details such as the client's willingness or ability to pay. If this is stopped then everyone will be a lot happier, except the bonus driven guys at the top.

  • Comment number 18.

    I lost 10s of thousands of pounds when the bottom fell out of my "with profits" endowments which I needed to pay my mortgage. And the fund managers still took their commision and charges for losing my money, it's criminal! What with that and the ultra low interest rates the savings I had worked all my life for have all but been wiped out.

    It's clear that any rules or codes will only have a cosmetic effect and those who have our money will take it for themselves whilst giving the savers and investors a very raw deal indeed.

  • Comment number 19.

    No one is in a disagreement that the financial sector is the most loathed business right now but we need find ways to regulate the banks without tough measures because that could be bad fro Britain's economy. Businesses would leave to other countries taking their wealth with them.

  • Comment number 20.

    Of course not, the whole system is rotten to the core!

  • Comment number 21.

    People who go investing in the financial world are generally looking for easy money.

    Those who really make money out of the financial world are those within it and possessed of a lot of knowledge, influence and power. They will always atttempt to place themselves in positions where they have an edge, not of course necessarily illegally so, heavens no, but where they have a definite advantage.

    The ordinary man in the street is afforded very little opportunity for easy money as even when investing in Unit Trusts or such he is in a position of dependency upon those within the financial system, any rewards that come his way will be modest by comparison with those that fall to those within.

    New controls and legislation will only catch the blatantly illegal operators, and then only some of them. The most definite thing about the fianacial world is that the big fish will always have the little fish for dinner.

  • Comment number 22.

    It's the same as with poor BBC moderators. What we need is the right protection, not a bunch of numpties that have never had a varied life experience.

  • Comment number 23.

    The whole financial services system needs revamping, look at the mess that they've got us into at the moment. I worked as an insurance broker for almost 40 years,FIMBRA who were the regulators at that time were coming out of a particular very large brokers, as they were coming out they met another group of officials coming in and expressed what a wonderful insurance brokers and financiers they were. The officials going in were the fraud squad. A lot needs to be done

  • Comment number 24.

    If "Approval" means not just the product itself but how it is marketted and sold and probably above all, the ubiquitous "Terms and Conditions" then that will go some way to reassure investors. Will they also review changes to those "Terms and Conditions" that are all too often introduced during the life of the product? Many of us are not financial experts, just investors looking for a decent return most probably for retirement so it is very important that the original product is not diminished by the later introduction of changes.

  • Comment number 25.

    I havent laughed so much for ages!The FSA,that bloated "jobs for the boys"organisation who are so aloof that the very people who "pay" their wages-IE the tax payer cant even speak with them-they never reply to emails,letters or telephone calls.They are supposed to "regulate"companies but this seems to be a very foggy area,too foggy for the FSA..If they are going to look at every mortgage,loan or investment then many companies will never sell anything to anyone because nothing will ever get approved or take forever to be approved.Such interference will result in all the same mortgages,loans and investmants-if you can get one that is!If there is a change of government shortly much of these proposals along with the FSA will cease to exist-good job too!We need to go back to the days BEFORE the FSA,they have made financial services a mess where the ordinary person no longer feels in control.

  • Comment number 26.

    As a financial adviser its interesting to see the FSA insisting that they must do more of what they were supposed to be doing for years. This is an organisation that has done its outright best to destroy the independent advice sector (which has the least complaints) and give the banking and insurance sectors (which have the most complaints) virtual free reign.

    Keydata is a perfect example of the almost total failure of the FSA to do its job at the right level, corruption and fraud were taking place right under the nose of the regulator and yet all the regulator was interested in is putting more pressure on IFA's.

    The sector needs regulation but at the moment the FSA are going for the easy targets rather than the ones that matter. The advisory sector doesn't need more regulation, it just needs clearer and fairer regulation, its at product level where pressure needs to be exerted to prevent providers from pumping out mis-leading literature to advisers and clients alike.

  • Comment number 27.

    I have worked in financial services for 34 years. I have seen the quality of financial products offered to the general public decline steadily as regulation has heaped cost and bureaucracy on the industry with only a slight positive effect on the quality of advice on offer. there is now considerably less choice than there was even twenty years ago.

    Many of the problems the industry has experienced stem from a lack of professionalism. The basic qualifications required can be undertaken in a week by someone of with a modicum of intelligence. Successive regulators have failed to address this issue. Now the FSA is seeking to shape the industry it regulates; this is unprecedented. It is also unlikely to succeed.

    Many years ago it was proposed that regulating products would be an easier way to approach the problems than regulating the provision of advice. This was, quite rightly, not taken up. It should be obvious that even a very good financial product can be applied in an unsuitable manner.

    Too many so-called advisers think that ethics is a county north of London. THE FSA has failed repeatedly to address the hard issues and, instead, goes after the soft targets. It is obsessed with commission. Commissions are about one fifth of the level they used to be on many products. Commission has to be fully disclosed at the point of any sale and customers are free to decline if they think it is too much. By concentrating so much on this issue, the FSA has signally failed to address the quality of advice that many are able to provide. The FSA would like everyone to charge fees. This would be workable if the advice given was actually worth something and the public could afford to pay. All that will happen is that wealthy people will have access to high quality advice and everyone else - including those who could really benefit from good advice - will be left to the salesmen from the big banks. Believe me, it is the financial services arms of the big banks that have been among the worst culprits of miss-selling.

    There are some good, professional advisers around. Like me, most of them have taken the time and trouble to study, take exams and acquire a proper professional qualification. Unfortunately, after 22 years of regulation, I fear we are still a minority.

    This measure is meaningless UNLESS you already know which financial products are suitable for you. If, like the majority of people, you are looking for professional advice, you take your chances with the generality of what is on offer.

  • Comment number 28.

    No 14, exactly my feelings so I won't waste any more time.

    Well done.

  • Comment number 29.

    DOES ANYONE STILL BELIEVE IN THE SCAPEGOAT CONCEPT OF 'MIS-SELLING'?? WHAT ABOUT THE MIS-MANAGEMENT OF PENSION & ENDOWMENT FUNDS???!! FSA regulatory fees will go up further, consumers will have to trawl through even more compliance-happy waffle in applying for what they know they want. FSA 'wrist-slap' fines beg belief & how do they help exactly?? WHERE IS THEIR FINE FOR NOT AUDITING BANKS CORRECTLY & SEEING THE ECONOMIC BANKING CRISIS UNFOLDING AROUND THEM?!

  • Comment number 30.

    Let's face it the Financial institutions are like Casino's. The house always wins. I've been looking for somewhere to put my savings that would provide a reasonable return. 6% offers look good until you realise it's only on 2.5k and 0.1 after that, add to that the monthly charge for the account and the loss of interest on the £1K and you have to ask what is the advantage? All I want is a simple transparent product that says you put X in and you get X per month / year back. But no its got to be marketed, spun and confused.
    The financial crisis isn't just the fault of the financial institutions, it Political parties selling off the Social housing stock driving the aspirational society of buy to rent. This limited supply driving up prices. It's the financial institutions excessive lending, 8x on peoples saleries? Allowing self certifying with out checks, and lending to the buy to renters based on the equity of their other properties. Spending money they didn't have. Its the media for the what to buy programmes that kept telling people the prices were rising sharply leading the stampede by Joe public who rushed to get into the bubble like the emperors got into his new clothes. Then bang? Why were we surprised when the bubble burst. Yes There should be more regulation, more transparacy
    a less bonus driven culture that encouraged high risk.

  • Comment number 31.

    I think the FSA are just puppets to the bankers. The bankers are the ones who control the FSA, not the other way around. It makes me sick that banks can still get away with giving big bonuses when there are people slogging their guts out on the poverty line on minimum wage.

  • Comment number 32.

    You would think that the government(of whatever political hue) would want to tightly regulate and monitor the financial services industry, especially the pension providers. All those people who have lost their pension savings or seen their savings reduced in value because of the machinations of the market are going to add to the cost of the state pension and benefit system.
    It seems sensible to me that the state minimises its liabilities by encouraging people to save for their retirement. Pensions should be fully funded, not pay as you go. Everyone in employment should pay into a pension scheme, those schemes should be tightly regulated to prevent what has happened in the past.

  • Comment number 33.

    What good is the FSA. I work in the Insurance Market and we have to get training in Money laudering and Data protection. All the training is based on pure commonsense and a waste of time. Yet we have lost our final salary pensions, the banks went into meltdown and we still have to do as the FSA tells to do ! One very fed up Insurance worker.

  • Comment number 34.

    Will tougher protection restore trust in the financial services industry?

    What an hilarious question! I have visions of a tremendously funny Python moment!

    I am sure changing the menu would not effect Mr.Creosotes appetite!
    How many wafer thin mints will it take for the next speculative feast to result in Mr. Creosotes messy demise?

    Oh the insanity of such an unreality masquerading as reality!

  • Comment number 35.

    " 1. At 10:20am on 12 Mar 2010, JohnH wrote:
    What we need in the financial services is control of risk. Salesman will lend money (to get big bonuses) to anyone they can, their bosses get their bonus on the back of the salesmens bonus. We must stop people like Sir Fred the Shred lending £2500 MILLION to ONE RUSSIAN (he lost the lot) "


    If I decide as a sane, adult to take my entire life saving to a casino and put the whole lot on red 14 why shouldn't I be allowed to? I know the odds are about 100 to 1 and if I lose I'm bankrupt.

    People forget that investment banks invest money on behalf of people who WANT them to gamble with it and are prepared to take the risk in exchange for a chance at big profits. Anyone who has ever bought some shares has done the same. If you want a guaranteed 4% put your money in an ISA. For a bigger profit you need to take some risk.

    The only problem comes when the banks don't explain the risk (which is when the FSA should be taking action) or when its gambles over-extend it and it risks regular savers money with its gambling.

    Incidentally the banks don't lend to "anyone"... if you don't believe me walk into your local RBS and ask for £2.5 billion. You won't get it.

  • Comment number 36.

    As in all other parts of life you will always find the wide boys who will get round the rules to make more money and not care whether or not they do harm financial or otherwise to others. Even with stronger rules people need to be more circumspect and ask advice of family of friends and see if they can go on recommendation whic should help. We have been very lucky with our last adviser but in the years before it varied as even accountants end up greedy and some in prison. Never put all your eggs in one basket spread the risk. Gordon Brown was the main person who ruined many pension funds so you it isn't just the financial services.

  • Comment number 37.

    As the FSA seem to have been pretty ineffective and toothless so far, I don't feel any safer! I might feel safer if the bank's financial advisors didn't have targets and bonuses for selling risky financial products

  • Comment number 38.

    The only thing that will restore confidence in the financial services industry is profits. Once banks are in profit they can pay off the government and be free again. Politicians don't make good bankers.

  • Comment number 39.

    Until any FSA recommended product comes covered by the Consumer Credit Act, as fit for purpose, then absolutely not.

    Until the FSA has teeth for the consumer, then pointless.

    Golden Rules on financial products for 'ordinary' you and me?:

    1) If there's too much small print and jargon - why buy it?

    2) If you read the small print/jargon endlessly and don't understand it - don't buy it, as it's obviously not made to be understood?

    3) If you have a lot of expensive debt you want to clear avoid it: as freedom from high interest debt will always out-perform investment and savings vehicles.

    4) Always endeavor have cash ISA 'rainy day' funds equivalent to at least 3 months salary.

  • Comment number 40.

    stanblogger wrote:
    The truth is that many financial service products are not really worth buying. For example, customers are often persuaded to buy insurance that is very poor value for money and maybe hardly necessary. Mis-selling is a matter of degree and is prevalent in the financial services industry because few customers understand what they are buying.
    - - - - - - -

    But you don't HAVE to take financial advice. I have never used a financial adviser and i have never had a problem with a financial services product - just the oppostite as even through the credit crunch i have done well and obtained positive returns.

    there's no law against taking responsilbity for yourself instead of relying on others to make decisions for you. Do you all trust the secondhand car saleman or does he have a vested interest to get rid of the banger at the back of his yard?

  • Comment number 41.

    I work in financial services.

    While I can understand the mass appeal of 'banning' high risk products this is a crude solution, and needs to been seen separately from the broader work of addressing the culture of rewarding risk.

    A clear link has been made to the endowment and pension mis-selling problems. These are however not 'high risk' products (but were on many occassions sold to ill-informed customers with insufficient risk warnings). If endowments were 'banned' as being risky then investment bonds/unit trusts/equity based ISAs etc. would all go too, they all carry the same investment 'risk'; however they are perfectly suitable products for some customers.

    The regulation/supervision needs to be on the sales practices and the product mixes of the advice providers.

    Nobody will be helped if we are in a situation where, well informed and willing, a customer is to be told he can't buy that investment because a bureaucrat has decided it is 'too risky' for anyone to buy - we are not children!

  • Comment number 42.

    These people don't "manage" our investments at all: they mis-manage them. But they still get paid while we suffer the losses. The whole system stinks. I'll never invest another penny: it's far safer just to stick it under the mattress.

  • Comment number 43.

    No....the money men are forever going to be tarnished by the last few months.

  • Comment number 44.

    It wont matter a jot if the new body fails to regulate correctly. The government has done nothing to compensate the Equitable Life pensioners even though the Omsbbudsman found against it and will always evade its responsiblity

  • Comment number 45.

    Regulation and scrutiny was once handled very well by the Bank of England. There's no reason why they can't do it again. Banks had to submit reports varying from weekly to yearly to the B of E.

    The B of E regulated the capital assets ratio. Northern Rock and RBS would never have got in their mess if the levels once demanded were observed. It also regulated country exposure and set risk levels and assessed risk for various financial products: forward contracts, derivatives, swaps, etc.

    We need only go back to those regulations plus prohibiting new financial products until the risk can be adequately estimated/calculated by the B of E. One of the underlying problems leading to our present crisis was allowing the issuer to tell the regulators what the risk attached to a product was.

  • Comment number 46.


  • Comment number 47.

    #36 "Gordon Brown was the main person who ruined many pension funds so you it isn't just the financial services."

    Gordon Brown made minor changes to corporation tax that meant the dividends from shares held by pension funds were subject to tax. The final salary pension pot I used to pay into folded when it turned out my employer hadn't bothered paying their contribution in for 5 years because the pot "looked healthy" before the stock market crashed in 2001.

  • Comment number 48.

    38. At 1:08pm on 12 Mar 2010, Robert Eva wrote:

    The only thing that will restore confidence in the financial services industry is profits. Once banks are in profit they can pay off the government and be free again. Politicians don't make good bankers.


    Agreed. This is the fastest and least painful way we can get the country running again (and then we can talk about socio-economic changes). Unfortunately, humans as a species are vengeful and vindictive. It won't be popular with the public, even if it's clearly the best bet to enhance their own prosperity.

  • Comment number 49.

    We certainly need to get rid of the totally hopeless Pension Regulator. It's predecessor organisation OPRA was superbly run despite having a very restricted remit. This current shower of no hopers are a disaster. But then one of it's senior management's previous claim to fame was to run a financial TV channel into bankruptcy. Says it all.

  • Comment number 50.

    As an IFA a feel that a lot of the problems stem from a lack of understanding by the FSA of the market they regulate themselves. Four points as examples:

    -The FSA have actively persued and punished IFA where wrong doing has happened (quite rightly). However they have ignored the biggest complaints source and that is the banks and their financial advice processes. Source: FSA ombudsman IFA's -3% Banks - 65% +

    -The FSA when they wanted experience staff recruited from the banks primarily (90% +). This is the same place that the problems came from (ie: structured products vs risks and poor advice processes) and so defacto ignored their previous places of work (see point 1 above)

    -The FSA does not understand the products (ie: CDO's, structured products,etc) and the inherant risks associated due to inexperienced staff at the right levels.

    -The FSA does not fully understand the motivation why people seek advice and the value it delivers. They see it as a salesman role and nothing more and therefore do not distinquish between salesman (banks, SJP) and those who offer advisory roles.

    End result is the advisory market is in turmoil and declining in numbers apart from the banks, less people are getting proper advice, clients are confused who will be honest with them and give impartial advice. Result = saving down across the UK, Debt rising, little financial planning by families/businesses, etc.
    (sorry about the grammar!!)

  • Comment number 51.

    It's hard to believe that the FSA will be able to achieve anything, going by their complete and utter inability to do so so far. They're probably far too close to the system and therefore unable to see the gaping flaws in it. If the whole financial sector decides stupid borrowing is "needed" (although I don't think they've ever got it out of their head that it's bad) then the FSA will no doubt go along with them. I'll certainly be amazed if they regulate mortgages to sensible levels because doing so would bring the housing market crashing down to sensible prices, which for some bizarre reason is viewed as abhorrent.

  • Comment number 52.

    The problem has, ever since the Financial Services Act 1986 was introduced, lain with the regulator rather than the practitioner.

    As one with a career in personal finance, and with a knowledge base that extended far beyond the basic and often-disguised insurance products, I can say with considerable authority that those who have overseen the industry have had little or no technical knowledge of the products available on the market. In consequence, product providers have been able to run rings around the FSA for nearly 30 years, brainwashing it into believing that a simple policy can be dressed up to look like anything the unwitting "prospect" wants - a case of a product only being able to stand up with smoke and mirrors, if ever there was one. The brainwashing has, of course, been made easier by the FSA's history of recruiting largely from the insurance industry - you scratch my back, and I'll scratch yours...

    The so-called qualifications to practise as an adviser were weighted heavily in favour of insurance policies, to the detriment of more suitable, more tax-efficient and better-performing investments. Commissions were, and still are, foremost in every adviser's mind, and "best advice" takes second place when it comes to selection of a product from a panel of providers. The winners are the "independent" (joke) advisers and the insurance companies; the losers are always their too-trusting clients.

    Better regulation will come only with better-quality regulators, who will clamp down on misleading advertisements before they reach the public domain, and suspend and fine every wrongdoer, and not just the occasional big bank.

  • Comment number 53.

    I think my husband and I were extremely lucky in that we bought our house when, in calculating mortgage affordability, prices were a sensible multiple of my husband's salary and part of mine, rather than something that we could never hope to repay, which depended upon massive and regular salary increases, or we would still be repaying well past retirement age.

    We also have to thank my husband's accountant and insurance rep, who between them recommended an endowment for 50% of the mortgage and 50% repayment. Endowment mortgages were never intended to be short-term (which was why some of them failed when they were cashed in too soon); our mortgage was spread and paid for over 25 years, with the result that we did receive a very reasonable sum of money back, and the mortgage was paid off with no extra payments from us.

    If you put regulators in place, you need to put people in who understand how money works and that high risk can work in some situations, not just people who are following a list of rules.

  • Comment number 54.

    OK guys? Just read the following interestingly verbose posts?

    #27 @12.15pm
    #41 @ 1.13pm

    Those post alone make me happy to rest my case, on my post #39 @12.01pm on financial products and the FSA 'PROPOSED' only changes??

  • Comment number 55.

    35. At 1:02pm on 12 Mar 2010, Peter_Sym wrote:

    " 1. At 10:20am on 12 Mar 2010, JohnH wrote:

    What we need in the financial services is control of risk. Salesman will lend money (to get big bonuses) to anyone they can, their bosses get their bonus on the back of the salesmens bonus. We must stop people like Sir Fred the Shred lending £2500 MILLION to ONE RUSSIAN (he lost the lot) "
    If I decide as a sane, adult to take my entire life saving to a casino and put the whole lot on red 14 why shouldn't I be allowed to? I know the odds are about 100 to 1 and if I lose I'm bankrupt.

    People forget that investment banks invest money on behalf of people who WANT them to gamble with it and are prepared to take the risk in exchange for a chance at big profits. Anyone who has ever bought some shares has done the same. If you want a guaranteed 4% put your money in an ISA. For a bigger profit you need to take some risk.

    The only problem comes when the banks don't explain the risk (which is when the FSA should be taking action) or when its gambles over-extend it and it risks regular savers money with its gambling.

    Incidentally the banks don't lend to "anyone"... if you don't believe me walk into your local RBS and ask for £2.5 billion. You won't get it.
    This is the problem, people are not prepared to accept 'ordinary' profit, they must have 'bigger' profit. The investment industry has always stated that it is not a casino or a 'gamble' but a long-term prospect for benefit through steady growth. It is the people who 'promise' untold riches for a 'small investment' that are at fault.

    Financial institutions are there to invest our savings to provide us with a comfortable return. Yes if I want to gamble I will go to a casino, or the lottery but I know that is a gamble. Sir Fred the Shred irresponsibly leant the £2.5B to the russian to get his bonus, not to make a profit for the bank or for the benefit of the banks savers.

    Michael Moore the film maker makes the following point when challenged by people who think he is anti-business. 'How much profit is enough?' The answer usually is you cannot have too much profit so there is no real answer. Moore states back, 'if that's the case why are we not all drug dealers? they make huge profits, over 1000%!'

    To gamble recklessly as Sir Fred et al did is to to act for the same motive as the drug dealer, all that matters is the profit that you as an individual can make out of the system, regardless of the consequence to society.

    The money that the ordinary person puts into financial services should firstly be at the lowest risk possible. If that means the Sir Freds do not get their bonus then so be it.

  • Comment number 56.

    #36 "Gordon Brown was the main person who ruined many pension funds so you it isn't just the financial services."

    I'm much better off than i was when Labour first came to power, and I'm unmarried, have no kids, live on the south coast and rent, why? because I didn't take out a lone which was way more than i could afford to pay pack. People's greed has caused this, its not that banks that have lost the money, its the people who cannot pay the banks back.

  • Comment number 57.

    I do not sell financial services products, but let us get something straight. In 1997 the Clown delivered a budget which through tax changes fundamentally ruined the value of private pensions and endowments. The effect was to "rob" the middle classes of their future to expand the civil service and benefits.

    The FSA got the blame for misselling.

    Then everyone started buying second homes and the finance sector started providing loans to fuel this expansion. On the back of this artificial growth was born the Clown's financial miracle. So we were effectively trading in futures on the property matket, just like back in the 1930's. The Clown has still not learned his lesson. As we go deeper into debt it is our currency which is now at risk and with that we would lose everything including the state pension and those final salary pension schemes.

    So don't blame the FSA, the Clown and the Liar are responsible.

  • Comment number 58.

    All 10 years too late.

  • Comment number 59.

    There is already a mortgage deal where you can borrow the deposit as a loan to get the mortgage.

    They are at it already, how on earth can you pay a loan for the deposit and the mortgage when you can't even save for the deposit?

    The big CON is in motion, stop lending let the housing market drop - then when the government acts and lends money cheap give away mortgages but make people wait as the boom for houses begins and prices get jacked up.
    All banks are there to steal your money, don't think anything otherwise, it's about time the customer told them what they are willing to pay.

  • Comment number 60.

    Although the FSA has proved to be a bit of a toothless tiger my own experience has highlighted the fact that they can only act if the relevant legislation covers the problem precisely - wriggling around badly drafted legislation is something the financial czars are rather good at - unless legislation is improved to properly protect the man in the street , rather than appearing to bat for the financial gurus then the FSA can promise what it likes - but delivery may fall short of expectations - while we have an expert at that sort of promise in charge of the country we can't really expect anything else can we!

  • Comment number 61.

    I am not sure that the FSA are the right people to provide consumers with any sort of comfort - look at the mess they have made with the financial services sector they currently look after. They seem more interested in themselves, beaurocracy and the press than consumers. A big waste of money. They treat customers like idiots whilst driving up costs in the financial sector and ignoring the big, obvious risks (credit crunch being one)

  • Comment number 62.

    I don't think the FSA will make a blind bit of difference to the 'masters' who are adept at every fiddle in the book to shift the risk onto the public and take the cash.

    My Pension was persuaded to give money back when the Actuary claimed that it was in profit - to avoid Brown's extra taxes, then when the bottom dropped out of shares and property, the pension had a big hole that the company says it cannot afford to fill.

    The FSA with its mid ranking ex bankers is not in a position to change any of this.

  • Comment number 63.

    In 2006 the FSA indentified the credit crunch as a possible risk and did absolutely nothing about it.

    When asked why now they simply decline to comment.

    Right now they are engaged in a major regulatory change called the Retail Distribution Review (RDR) which will make independent financial advice the preserve of the rich and drive the vast majority of consumers into the arms of the high street banks, who will then fleece them.

    The FSA has been run, is being run and will continue to be run for the benefit of the main banks in this country. If you look at where most of its top personnel have come from and where they scurry back to after working at the FSA then the conflict of interest becomes clear.

    The FSA is not fit for purpose, having failed this country in every way that it is possible to fail it.

    Lord Turner should be fired and the FSA dispanded with immediate effect.

  • Comment number 64.

    No of course not - This is the reason we are where we are. The Bankers and Financiers have only acted as they have because they could. Had the correct regulation been in place - and everyone in the industry knows it should have been, then we would not be here.

  • Comment number 65.

    1# I would like to think it would be possible to implement some of the ideas you suggest.

    I would like to think that we could develop a system that puts the onus on the banks to demonstrate to an independent body that “esoteric financial instruments” (lets call them fiddles for the sake of simplicity) do not flout the spirit of the law, and couple this with draconian retrospective punishments for those that fail to comply. You never know this might actually save the tax payer money

    I would like to think that these powerful businessman and investment professionals (one or two conservative voters amongst them?) could actually demonstrate the type of personal responsibility that Dave Cameron so passionately preaches – if they did perhaps we wouldn’t be in quite such a mess and the so called ‘feckless poor’ could draw inspiration from their role model behaviour.

    Unfortunately I rather suspect that The Ghosts of John Galt 34# has a more accurate handle on reality.

    Labour has failed to tackle the problem. The alternative is to place trust in an empty headed old Etonian bringing his old school chums to account puuleeese! This is but one genius quote from George “ No one takes pleasure from people making money out of the misery of others but that is a function of capitalist markets”.

    If this is our choice God help us!!!

  • Comment number 66.

    38. At 1:08pm on 12 Mar 2010, Robert Eva wrote:

    The only thing that will restore confidence in the financial services industry is profits. Once banks are in profit they can pay off the government and be free again. Politicians don't make good bankers.


    Yes, but if the last three years have proven anything it is that bankers don't make good bankers either.

    Unless you consider borrowing your way into bankruptcy and needing to be bailed out good banking.

    There seem to be a number of bankning employees posting who are whining about the fact that the taxpayer's who bailed them out think that bonuses should be limited.

    Perhaps you should just remember that if you hadn't behaved so incompetently, creating an entirely uneccessary recession, costing us millions of jobs, thousands of businesses and goodness knows how many families and lives then you wouldn't be in this situation in the first place.

    If it weren't for the tax payer you'd all be out of a job, but ironically you have been insulated from the recession that has destroyed
    so many others. The recession you created.

    Oh and the FSA are in bed with the high street banks too so nothing they do will improve the industry.

    The only thing Lord Turner's done since getting his position is pose for a lot of silly pictures of himself trying to look tough whilst reading a copy of his own report.

    Why would anyone read their own report? Surely you'd already know what was in it?

  • Comment number 67.

    It does not need more regulation it needs prossecution,Prison is the place for crooks.

  • Comment number 68.

    Good idea in principle, but lets not forgets, the SEC in America one passed a similar law banning people who earned under a certain amount from buying certain stock/shares/investments. While protecting from dodgy investments, also ruled out "the masses" from the investments that allowed them to make the most returns.

  • Comment number 69.

    What we need is a rolling back of the entire financial sector as it has proven to be a bloodsucker of public assets and the Nation as a whole in order to finance greed. As a christain socialist and follower of the word and truth of Jesus christ I condemn finance capitalism as evil and deregulation as crime against human morality, decency and human rights.
    We need socialist, communist, christain and liberal militancy to destroy evil in the same we we had to destroy Nazism. Finance capitalism is fascism with another name and is part of the antichrist. Unless we organise to remove the influence of finance capitalism all we know and care for will be destroyed and the suffering of the worlds poor will worsen. THE RICH WILL NOT ENTER THE KINGDOM OF HEAVEN. I DID NOT SAY IT, OUR LORD AND SAVIOUR JESUS CHRIST DID.

    US/British Finance Capitalism is part of the Antichrist I am convinced of it, you only need to listen to Cameron's plans for Britain, smashing public services, privatising welfare, the poor get poorer while his Rich pals get richer. Britain is a force for wickedness in the world as we have removed our compassionate caring core and embraced a sickening culture of greed. Children in poverty while the finance sector gets fatter. THIS IS EVIL.

    I salute the workers of France and Greece for thier heroic resistance to the beast of Finance Capitalism which is of the Devil.

  • Comment number 70.

    The FSA are worse than useless. They are ineffectual. The FSA have been around for years - but what did they do to stop the banks getting into the problems they did a few years ago? Absolutely nothing. Ineffective policies produced by ineffective people.

  • Comment number 71.

    Bluntly No! The FSA already look after my savings. The rates are abysmal. I have little faith in the amrket and, frankly, it is decling fast. My great nephew summed it up neatly when I was trying to convince him to save for something "It isn't worth while because when I have saved the money the price has gone up more". I can't argue with that!

  • Comment number 72.

    The old expression that a fool and his/her money are soon parted; the greedier the fool the faster the parting.
    This is financial evolution in action; why protect greedy fools ?

  • Comment number 73.

    If the FSA were stable boys/girls all the horses would have bolted about 5 years ago and they will have only noticed now!

  • Comment number 74.

    I just want banks to get back to what they were set up to do; look after our money.

    I want them to provide - a not-often used word coming up - "services" as part of the deal in which we entrusted our money to them, and they gave us some stuff free, such as security for our money in their nice big strongrooms.

    I want them to stop offering - a too-often used word coming up - "products" which they, having taken our money will then sell us other stuff, whilst at the same time regarding us with the same regard as one would to an off bloater.

  • Comment number 75.

    Of course we need safeguards and the sooner the better we have all been made wary of financial instituions and to get everyone back to normal we need to feel safe we need to feel they are looking after our best interests and not their own too many people are now keeping too much money at home and this in itself is not a wise thing to do.

  • Comment number 76.

    The Track Record of the FSA can hardly be described,Impressive.One could argue that they have a difficult role to play.They have to protect the public from corrupt business practise.Nothing says they must protect the Public from bad business practise.
    And that is the major problem.
    How can it possibly be bad business tactics to maximise profits?
    How can it possibly be bad business tactics to sell products and or services to people who want to buy?
    How can it possibly be bad business tactics to borrow more than your company can afford to pay,then walk away,leaving your creditors,wondering why they ever trusted you?
    They end up in Financial difficulty.
    You carry on.Always another company to create.Make profits,run into the ground,and walk away from.
    And guess what?Your integrity is never questioned.
    Will the FSA ever address this problem?

  • Comment number 77.

    The FSA let us down badly in the current banking crisis and it needs a radical shake up. I fear that the banking system is now held in such low esteem that there has to be global regulation and clear demarcation between high street banking and speculative financial trading in futures, hedge funds, etc.,etc.,where the risks and possible calamitous losses are quite separate and borne solely by the traders and their investors - not the government or the tax payers.

  • Comment number 78.

    I think everybody must share the blame of the financial collaps. Even bbc should share the blame for all the encouragement we got from programmes that went wild. To buy or not to buy? That is the question.

  • Comment number 79.

    Mr Sants says:

    "We will now seek to proactively intervene earlier in the product chain to anticipate consumer detriment and choke it off before it occurs," he said.

    Well, that's reassuring.

    Nothing will improve in this area without standards that are legally enforceable. A good comparison might be what minimum standards you are legally entitled to when you buy car insurance (and, to push a point, what happens when you paid a premium to someone who falls short of those standards, and what happens to the person you unfortunately crashed into when you believed you were fully insured).

  • Comment number 80.

    Would this be the same FSA that so effectively policed lending previously to the market collapse in 2008?

  • Comment number 81.

    Re .69 - Norman Brooke

    "We need socialist, communist, christain and liberal militancy to destroy evil in the same we we had to destroy Nazism. Finance capitalism is fascism with another name and is part of the antichrist."

    Okay, after all that's happened since the millennium I'm sure that many people would be glad to see the mobilised sections of society you mention bring down the current financial system, and many of those who operate it. I, for one, can't wait!

    However, you are strangely silent on what will take its place? Will you recast Britain as a communist state? Didn't someone try that once, somewhere else? I think it didn't work out because someone still had to be in charge - his name was Snowball or Napoleon or something? Maybe in this new scheme of things we simply all go back to living directly off the land?

    Let's hear your manifesto for real change.

    Alan T.

  • Comment number 82.

    The credibility of pensions has been totally destroyed. Weakened by Slave Labour, it was effectively destroyed by the collapse of the economy.

    We're all destined to go cap-in-hand and beg for a state handout that will doubtless be refused to anyone who has ever bothered to even look for a job!

    New Labour? Arre you proud of your achievements?

  • Comment number 83.

    The financial service industry is only there to serve itself and doesn't care a jot about the customer. Hence we need a strong FSA to make sure the financially ignorant customer does not get ripped off over and over again.

    However, since the government is afraid to stand up to the Banks there is little hope it has teeth to stand up to the financial service industry.

  • Comment number 84.

    82# You are cleared to land.

  • Comment number 85.

    "69. At 5:48pm on 12 Mar 2010, Norman Brooke wrote:

    ....We need socialist, communist, christain and liberal militancy to destroy evil in the same we we had to destroy Nazism....."

    Do you have no idea how evil the communists can be? My mother's next door neighbour was a Hungarian refugee, too frightened to go back to visit her sister, her best friend was a Romanian refugee, one of my brother's friends was a Latvian refugee. They all loved their countries, longed to go back, but were horrified at what they had seen happening behind the Iron Curtain. Why do you think people died trying to get over the Berlin Wall?

    You cannot have a communist democracy - it is a dictatorship - but I imagine if it's a dictatorship run to your rules, that's ok, then?

    And if, as you say, you think the UK is a source for wickedness: I beg you to look to North Korea, Zimbabwe, Burma, just to name a few.

    If you are Christian - heaven help us all.

  • Comment number 86.

    No - These are relatively minor changes which aren't going to make much difference in the grand scheme of things.

    Its not as though sticking a big FSA sticker on a product is going to make it sell better. In terms of trust the FSA would be considered a 'toxic' brand at the moment.

  • Comment number 87.

    Why should I feel safer under the eye of the FSA. Recent experience has only shown that they are no more than jobs for the bolshevik boys.

  • Comment number 88.

    Money makes the world go round! The have's and the have not's! The rich and the poor! No matter how you cut it the rich always come out on top! So be like me ...No money worries! No money to worry about! But I do have good health! So ALL those that fight, beg, steal and get all het up over money I feel sorry for you!

  • Comment number 89.

    I thought this was what the FSA was set up to do in the first place.

  • Comment number 90.

    I said about a year ago that the banks would go back to their disgusting habits when the intense media attention slackens off and lo and behold ....

  • Comment number 91.

    It used to be men in Grey Suits that run this country, now its men in pinstripes who run the world.

  • Comment number 92.

    I would feel a lot happier if the only agency in charge of national finance was the Bank Of England.

    Its function is not to take risks to make a profit or a bonus rather it is to be prudent and keep us solvent.

    If everyone had one credit card,a current account,a savings acount,an ISA and safe guaranteed growth bonds it would be so much more easier to control and contain.

    Instead we have people with multiple maxed-out credit cards, deep in debt,with no real ability ( or desire perhaps) to repay and with little or no savings.This is compounded by financial products which even the bankers cannot understand and track.

    The banking system is simply out of control as bankers put their bonuses before common sense.

    The bonus culture is still with us so it's only a matter of time before we have yet another credit crunch, but as usual only time will tell.

  • Comment number 93.

    Yes it should be looked into & some form of acceptance/compliance quality mark.

    But will it be abused by some rip-off companies, just as many abuse building & plumbing etc safety & other certififications.

    If they have such a system then first I think we need to bring in a much stronger law with much heavier penaltys for those who cheat & lie/deceive and fraudulantly use certified kite markes/standards.

    Such people should be treated as the worst drug dealers etc and have their homes and all assetts put at risk of confiscation if they defraud & deceive.

    Yes, do it, but not namby pamby style and not just as market slap and the market should contribute towards its cost and cost of policing at a decent standard.

    As with so many consumer protective standards etc, there are just so few inspectors & investigators that most are a complete nonsense.

    The BBC has reported on many many many incidents & companies & people who abuse regulatory standards kite marks etc, which is a total disgrace because it just shows complete failure of such standards to police themselves & abilitys to stop criminals.

    I think the whole area of "approved" standards needs to be seriously shaken up.

    For a start, I think that if someone or a business falsly advertises a standards kite mark then just as they do with cars via non compliant road car tax/insurance, the business assets should be impounded & frozen & in the worst cases it should be made easier to freeze the assets of wives & kids of these people who generally hide their ill-gotten gains by transfer of ownership. There should be no 6 week etc term allowed to comply. If you falsly & fraudulently/deceptively advertise kite marks, then I think the consequences should be much more serious.

  • Comment number 94.

    On a limited scale it seems a good idea, but not this particular FSA. The people in it must have credentials which put them firmly in the camp of the customer, and not there to pontificate about the kind of things most people don't understand, so they appear however mistakenly to be on the side of the bankers. But at the end of it all you can't get away from the fact that if you have a capitalist system there will be risk, FSA or no FSA. There's always been a place you can put your money at very low risk, but you won't get rich quick by it.
    What's needed much more than changing the face of the FSA is to separate the normal banking functions that we all need from the loopy games of monopoly that the bankers play at our risk, and in which the bigger mess they make of it the safer their own position seems to be - bonuses and all

  • Comment number 95.

    Having seen the level of corruption and sheer criminal activity illustrated by the antics of the financial services "industry" I feel that all those who work in this area should do so from a prison cell as a matter of course - just to save time and effort arresting them or extraditing them from the Caymans.

    And this includes employees of the FSA itself - or whatever it is called this week.

    Remember: gamekeepers and poachers in revolving doors. MPs/bankers/financial regulators have a habit of picking up lucrative jobs by stepping into the magic revolving door - taking their crooked contacts and dodgy loot with them.

    Expenses form anyone?

  • Comment number 96.

    I listened to Hector Sants, the FSA's CEO, on Radio 4 last Friday talking about how the FSA is going to increase its staffing to deal with this added responsibility.
    Frankly, I have zero confidence that the FSA could ever be effective in carrying out this new regulatory role.
    What is needed are punitive fines on companies that transgress the FSA rules - £1million, £10 million, £20 million etc. Punitive fines would concentreate the minds of the financial services companies and ensure they are very careful before launching new products or in permitting any potential miss-selling of those products.
    Hugo Sants' idea is just another public sector job creation scheme for civil servants leading to increased costs and, in a few years time, another pubic enquiry into why things aren't working.....

  • Comment number 97.

    i agree, banks are basically legal extortionists, but at the same time, rather than more protection how about people, investors, customers etc actually READ the very good, clear and concise literature that accompanies a product!! and take some responsibility as this is what it ll comes down to... customers want cheap products but have such a propensity to complain and "win their money back" that the cheap products become expensive and they spoil it for everyone

  • Comment number 98.

    The FSA are a quango. Incapable, not fit for purpose. Believe them, you must be joking! Don't forget this lot ruled over chaos (while Rome burned) and deserve the same fate! Try getting any sense from their fraud department, laughable!

  • Comment number 99.

    Had our Chancellor done his job properly instead of pouring (as it has turned out) toxic debt into pulic services for votes he could of stopped the financial services meltdown - he and all the G8 Chancellors knew of the debt & asset bubbles as they were warned many times. Votes before people, he is disingenuous (falsly frank or niave in manner) in all Government matters, he needs to go - remember "there will be no more boom .... ". How can he possibly be the man to lead us out of HIS mess.

  • Comment number 100.

    'Will tougher protection restore trust in the financial services industry?'
    It'll be very hard to re-convince people now:
    The FSA failed to do their job previously - by failing to use properly, the 'protection' they could have given then - hence the Financial problems this Country faces now. Why should I have confidence in them again?
    Should I forgive the FSA that acted so incompetently before? Perhaps I should also forgive MP's who misused Taxpayers money immorally, as well?
    I am sick of constantly hearing that admission of incompetence: 'we have learned lessons'. I want a Government & Institutions that are not so incompetent that they have to continually repeat that phrase - after 13 years you would think they would have learned enough by now...


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