Monday saw a grilling of Andrew Bailey, former CEO of the FCA, by Treasury Committee MPs regarding missed opportunities for the early detection of problems at the failed mini-bond provider London Capital & Finance. 

He said the FCA's focus at the time had been on whistleblowers, but with none at LCF the firm did not come to the FCA’s attention early enough. 

So, he blamed an outsourced call centre he inherited. Despite more than 600 calls from worried clients, no action was taken.

Apparently, a mere 600 calls didn't make LCF a big enough blip on the radar. I’d like to see what they would have to say if we came up with that sort of defence for our businesses!   

So, the FCA’s inaction leaves us, the advisers and planners who run a tight ship, working honestly for the benefit of our clients, with the liability.

We are the ones who have to pick up the bill for their inability to regulate and police the companies that they watch over. 

Based on the Editor’s comments in his recent article, we can expect a 30% hike in FSCS fees this year. So that brings our fees in at just short of £14,000 per annum, an increase of 291% over the last 3 years.  How is that even possible?  

And who ultimately ends up paying? Our clients, of course - those clients who are sensible enough to seek and pay for professional advice. 

My FSCS levy is costing them, on average, over £100 a year each. Add to that the costs of FCA regulation and PI costs, that’s approximately £350 per annum per client.  Then think about the additional costs incurred with the introduction of things like MiFID reporting – the list goes on. 

There will always be people who will never pay for advice. However, often it’s those in the trap of not really being able to afford it, that end up being DIYers, ending up in things like LCF. 

If government wants to make financial advice accessible, that will only happen when the costs of providing advice reduce.  And those costs will only reduce when there’s a system whereby regulation is good enough to avoid the compensation bills.   

Nicola Watts APFS Chartered Financial Planner, Chartered Wealth Manager, CFP Chartered FSCI - director of Jane Smith Financial Planning

After joining the family business in 2000, Nicola qualified to provide advice in 2001, and has been a director of the business since 2006. Since the retirement of her mother (Jane Smith), Nicola bears sole responsibility for the management of the firm, and the advice provided to clients. Nicola is married to David and has two young children, Emily and Olivia, and Poppy the black labrador.