Those of a more cynical disposition might claim some justification for the view that the Treasury Co...
Those of a more cynical disposition might claim some justification for the view that the Treasury Committee has already reached a conclusion to its splits inquiry and is now just working backwards.
Put simply, the MPs' feeling seems to be that somebody must pay ' they just haven't worked out who that somebody is yet. In that sense the investigation is very much retrospective rather than forward-looking ' not so much 'how do we stop this sort of thing happening again?' as more a plain old whodunnit?
The compensation culture is a given, it is just the shape of it that we do not yet know. In the best tradition of Agatha Christie we have a fine list of possible suspects: the rocket scientists who created the trusts, the investment banks that hawked them round the investment houses, the houses that went for the idea and the stockbrokers and advisers who sold the trusts. And what about the regulator? It allowed the direct advertising of the product aimed at attracting consumers. But the regulator is unlikely to appear anywhere in the list of those held culpable.
Also conspicuous by their absence from the list are the investors themselves but, in the world of compensation, blaming ourselves is not really an option. The concept of caveat emptor has gone out of the window. And as our cynic might also conclude, there are not many votes for MPs who suggest the electorate should in any way look to their own actions in any financial scandal. Well, at least we have narrowed the field a little. The Treasury Committee knows somebody must pay ' as long as it is not the investors. Yet that still leaves a mighty long list of possibilities. If the committee carries on as it did last week, eventually all the suspects will be cajoled into blaming each other.
In the legal profession, prosecuting barristers call that a 'cut-throat' defence, something they greet with glee because they know they stand a huge chance of gaining a conviction. Already the cracks are appearing.
In the entire list of suspects Chris Fishwick stands tall. But while MPs have dubbed him the unacceptable face of capitalism, to become too fixated on the bonuses he was paid is specious. No-one has proved any single point of malpractice by either him, Aberdeen or the rest of the split capital trust industry. They employ compliance departments to work within the letter of the law. It seems in many ways unlikely the Treasury Committee will prove anything other than a complete lack of foresight. Sadly, it is many intermediaries who will find themselves paying out compensation.
Aberdeen, BFS and the other splits providers stood with the FSA at their backs. Advisers did not, and consequently they cannot claim, as investors themselves do, that they were misinformed by splits providers. They are the advisers. Their advice must be expert. The rule of thumb is do not advise a client to buy that which you do not understand. Take nothing product providers say at face value. It appears that is exactly what happened with split caps. That is why advisers are likely to be the ones to pay, not the faces that are appearing in the press.
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation