Posted by Jill Kerby on January 01 2010 @ 18:49



I gave up on the idea of New Year’s Resolutions for myself a long time ago. The size of the list was so daunting – 1) Drop two dress sizes;  2) Buy fewer shoes (shoes being weight neutral, you understand); 3) Win the lotto -  you get the idea.


However, that doesn’t mean that I don’t think New Year’s Resolutions are not a good thing…for other people.


And I know just the person who could use a nice, tidy list of resolutions for the start of the new decade as he takes up his new job as the as the head of the Financial Services Authority, Matthew Elderfield.


Mr Elderfield, who, for some reason that eludes me as I watch the rain cascading down my window and forming a small pond on the street outside, decided to trade up his job as the head of the Bermuda Monetary Authority for the role of Head of Financial Supervision at the newly integrated Central Bank of Ireland.  He clearly relishes a challenge …in a country with two seasons and one climate, Spring, Autumn and wet.


Whatever about having to supervise the rebuilding of the prudential side of the Irish banks, which will be no mean task given the presence of NAMA and the severity of the economic downturn, Dublin’s reputation as a financial services centre hasn’t exactly emerged from the turmoil of the past year with a sterling reputation either. 


I just hope he doesn’t end up so overwhelmed by these issues that he overlooks ordinary, end users of financial services, who are none too happy either.  They – we - are the ones who will be saddled with NAMA debt and many of us now look upon our mattress as more than just something to help us secure a good night’s sleep: for some it’s become an alternative deposit account, a safe deposit box, so to speak, that was only provided by the so-called ‘professionals’ in the banks, stock broking firms and life and pension’s companies in whose trust we once left all our money.



So here are a few You & Your Money 2010 Resolutions, Mr Elderfield, to mull over and to add to your own list this January. I’ve kept it pretty short to keep down the discouragement factor:


Resolution 1.)  Ban commission payments. At the heart of every rip-off of every consumer of financial services products, whether it be a savings plan for a child’s education; a useless payment protection policy (the kind that doesn’t always pay out when you lose your job); an unsuitable pension or even a low cost mortgage that ends up costing a king’s ransom…is a non-transparent commission.  Get rid of them. 


No one has been spared the scourge of commission:  your own Financial Ombudsman’s reports are full of elderly people whose life savings were targeted by so-called ‘qualified’ financial advisors at their banks who convinced them to gamble it on short term stock market funds and tens of thousands of young and foolish first time mortgage buyers who were signed up by banks and brokers for 100%, interest-only 35 year loans that carried obscene commissions.


And when you get the inevitable feedback from the industry about how nobody in Ireland is willing to pony up for a genuine fee based on expertise and time, (unless of course the service involves legal, accounting, tax or medical advice), just mention how your old colleagues at the Financial Regulator’s office in London have already set in motion the phasing out of commission remuneration for independent advisors by the end of 2012. 


Resolution 2)  No more mister nice guy.  When widespread mis-selling of a financial product is unearthed – and they will be – the culprits at the top of the company who are ultimately responsible for the actions of their juniors should be brought in, sat down, and told the consequences of their firm’s misbehaviour. Chances are much of the problem will involve older people being sold high risk stock market funds, and other unsophisticated “investors” who really should be leaving their few quid in the post office. I have an old file somewhere here on my computer of cases of Irish financial services companies operating in the UK who were fined and had their entire sales-force pulled out of action by the FSA (your old colleagues) and re-trained.  It hasn’t happened here, but should have.



Resolution 3) Name and shame the worst transgressors of the FR legislation and codes of practise.  Ireland is a small place (even smaller than Bermuda in some ways.).  Everyone and his dog knew who was involved in the famous Davy Stockbrokers/Enfield Credit Union case last year even before it came out in the Courts or in the Financial Ombudsman’s reports. When large sums are involved and the same kind of transgression keeps coming up, the bad guys should be named and shamed.  (Not that it might make much difference given what the banks in particular have gotten up to.)


Resolution 4.)  Stop the deposit takers from ripping off elderly customers. It really, really bothers me to still hear how many people leave large sums of money in bog standard ‘inertia’ deposit accounts that pay a pittance percentage of one percent in interest even while their institution offers higher return products.  Again, older people are more likely to be directed into these lousy interest accounts.  It doesn’t happen in the UK where banks are required to alert their customers to better paying accounts, but the banks here were able to convince the legislators not to include this in the FR’s remit when it was set up (surprise, surprise. Get it amended.


Resolution 5.)  Take on the credit card companies.  Not only are their surcharges and penalties outrageous, and the way that interest is calculated both opaque and usurious, but they continue to present their terms and conditions in little booklets full of small print written in outrageous technical and legal jargon.  Before anyone should be allowed to sign a credit card application form they must also acknowledge that they have read a single page of terms and conditions, the most important ones being “That you risk paying X amount if you miss a payment or exceed your borrowing limit;  “That you will pay X interest on all cash withdrawals compared to X interest for purchases” and “That if you do not clear your credit card balance every month, the compounding of interest on the balance and further purchases may result in damage to your financial wealth.” 


Or words to that effect.


Five resolutions are about as many as you should probably consider for this year, but I’d like to add another, though it’s not as important as it was a couple years ago.


If you check your advertising budget you’ll see that the Financial Regulator spends a small fortune warning punters against unauthorised boiler room operators based in near and far locations who cold call them with offers of shares or other investments that they swear will make them rich.


Anyone I’ve ever met (and I’ve been cold-called myself just hangs up.  Nevertheless, ads appear in all the newspapers quite frequently warning of this danger to our wealth.  Meanwhile, for about four years up to 2008, there was a stream of property shysters flying into Dublin and Cork and Galway every weekend flogging foreign properties from Bucharest to Bangalore via Dubai and Dallas.  Even snowy, remote Newfoundland holiday homes were on display to guileless Irish investors.


In the (unlikely) event that another property bubble is inflated, perhaps you could see that this last Resolution is enacted:  Thou shalt not attempt to sell overseas property in Ireland, and take away cash deposits, unless you are properly vetted and licensed by the Financial Regulator.





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