Prime Minister (via email to 10 Downing Street)
I realise that you and your Chancellor are struggling with a few home problems but I am alerting you now to the Financial Tsunami that is currently brewing in the Thames Estuary and heading straight for the City of London that could well lose you the next General Election and provide fodder to the pro-EU brigade who think that jobs can be created through ruthless regulation that satisfies no-one except swathes of legal buffs working for the super regulator and overseas banks that to date have a very poor record of job creation in the UK.
The crux of the problem goes back to your predecessor and the mid-80s when a certain Mr Parkinson did the rounds in the City and decided with the support of your party's Cabinet at the time to strip away the franchises of the many British partnerships and allow banks to compete head to head in securities operations presumably in the name of job creation and better marketibility. I don't intend dwelling on the marketibility issue only to say that recent financial press comments concerning High Frequency Trading and a re-examination of Glass Steagall Act in US leads me to the conclusion that the creation here of multi-faceted financial institutions has been a big mistake and should be reversed asap. Furthermore the untold damage that excessive regulation has done to the City and the UK's prospects viz-a-viz to act as the protector to British business and job creation has been lamentable. Your late father, a respected stockbroker, may well have mentioned to you that 100s of British stockbroking agency partnerships have been shut down due to the FSA and its predecessors but how many people in the City care about the effect that this has had on brokers and their clients or indeed the market as a whole and british business interests? Far too much focus is made on the City success stories but I'd like you to consider briefly the damage that investment banking and derivatives trading in particular has done to British business. I can assure you that one day economic historians will consider the last decade and what we are about to witness as the final nail in the coffin of London acting as a financial trading centre for the UK economy and its outposts in providing a fair and efficient market place for the raising and managing of capital.
I am of course referring to the FSA doctrine known as the Retail Distribution Review which will undoubtedly put between 3,000 and 30,000 advisers out of business and damage for ever true independent advice. But let me enlighten you further. As you know one of your party's main areas of focus is in small business finance (AIM, Plus Markets and Private Equity, etc) but by stripping out independent brokers and IFA's from the equation I think that AIM and small company investing could well get extinguished as FSA is intent on reworking the definition of 'Risk'. The Treasury Select Committee has called for the delay of the RDR but in my view it should be halted now before untold damage is done. Of course, I have an interest in this viewpoint as I am one of the 3,000 or so experienced stockbrokers who are being forced to go back to school which I find a total liberty. The way that many of us are being treated here is all good news for the banks and new age 'wealth managers' who are more intent on collecting their fees than giving a bespoke investment service.
I realise there are perhaps bigger problems to consider for your Government at this time but consider the implications here. The credibility of your party as well as the future of the London Stock Exchange is at stake too. Independent advisers have already taken alot of punishment from 'Big Bang' and regulation. Please use your common sense to put a stop to this nonsense that is the RDR before more untold damage is done because the consequencies for Britain are severe if this doctrine is allowed to be passed through without any proper analysis. I regret that the FSA,LSE, CISI & APCIMS have failed on all counts so far.
Yours
Richard Hoblyn FCSI
No comments:
Post a Comment