SCM Direct co-founder Gina Miller says the financial services community is still in the dark over Brexit as she hits out at trade bodies and lobbying groups for so far failing to secure a good deal for the industry.
In an exclusive interview with Fund Strategy sister publication Money Marketing, Miller shares her fears over the unclear path financial firms face as the Government prepares to trigger Article 50.
The woman who took the Government to court over Brexit also reveals why she took up the fight, the mistakes she made along the way and how she plans to keep fighting for charge transparency.
Miller co-founded SCM Direct in 2009 with her husband, Alan, and subsequently launched the charity True and Fair Campaign, which focuses on defending transparency in financial services.
But Miller gained much of her public exposure through her widely reported and fiercely contested battle last year to obtain a vote in Parliament on whether the UK could legally start the process of leaving the EU.
Miller, who has found herself an unloved figure among many of her peers in financial services, launched her legal challenge a month after the UK voted in the EU referendum. She argued that, without parliamentary scrutiny and approval, invoking Article 50 would be unlawful.
In November, a High Court ruled that MPs should vote on Article 50.
In January, the Supreme Court agreed a vote was needed, a ruling that Miller says stopped the Government acting “whenever they felt like it”.
MPs ended up backing the European Union Bill this month by a majority of 384, allowing the Government to push ahead with Brexit but not before the Bill faced pushback in the House of Lords.
Brexit negotiation talks will formally be triggered on 29 March. But Miller criticises MPs for simply “rubber-stamping” the Government’s wishes. She says: “I can only lead the horse to water but I can’t make it drink because I won the case with the Government but ministers haven’t actually performed their role properly.
“They haven’t debated; they turned into this rubber-stamping arm of the Government, which is not what they should be doing.”
I won the case with the Government but ministers haven’t actually performed their role properly
Miller warns there are still “many hurdles” to overcome in a relatively short timeframe before Britain leaves the 28-country bloc.
She says: “We should all hope that parties on all sides of the table will enter the negotiations with mutual respect and adamantly reject talk of punitive coercive measures.
“Seeking to give Britain a bad deal to instil fear in other potential ‘leavers’ is not only infantile and short-sighted but is contrary to all the ideals on which the European Union has been built. Neither the UK nor any EU member state should wish to see a failing neighbour, or exploitation by powers outside the EU and UK.”
Miller warns uncertainties remain for the financial services industry, which in her view has not been given enough guidelines around how life will be after Brexit.
She says: “The financial services sector has to accept that passporting is not going to happen if we have a hard Brexit. The industry has to start being realistic. It is not even beginning to talk about that, and that’s worrying.”
Miller argues trade bodies such as the Investment Association have never given a practical response when asked about the consequences of Brexit for the industry.
She says: “The problem is that, in the City, you have so many different messages from different organisations, even the ones that were able to step up. These organisations have some of the most clever people in the country but they are giving up.”
An IA spokesman says:“The Investment Association is working very closely with Government, regulators and key EU stakeholders to surface and assess the issues that are affecting the asset management industry as a result of the UK’s decision to leave the EU. Ensuring the industry’s priorities are understood by key decision makers does not require a running media commentary.
“We will continue to work with our members and stakeholders across the UK and EU to ensure that the UK’s asset management industry, which services millions of savers across the world, continues to flourish in the post-Brexit world.”
Although she does not regret bringing the case against the Government and says she would do it again, Miller acknowledges her lone-wolf approach may have been misguided.
She says: “I was really naive in going out alone and that is one of the things I really got wrong. I thought ‘I have to prove this is possible,’ and I thought ‘If I can do this, other
people may come alongside.’ But nobody did.
“There are things that I miscalculated hugely. I thought other people would have joined me and funded me. Second, I didn’t think it was going to go beyond October and I didn’t anticipate the reaction it had; some people have tried to destroy all parts of my life.”
Since appearing on TV with her campaigning, Miller has received numerous threats, which even today force her to keep away from the public. She says: “The threat repeated all the time is that I need to be the second Jo Cox. That’s the one that gets repeated all over again. I have an alarm system and panic buttons in every room in my house now.
“I’ve got a satellite office here at my private members club. I don’t go to the office and I don’t go out on weekends at all.”
Due diligence on skis
Miller remains passionate about her work on charges transparency. She says her biggest struggle is to get hold of robust data, especially on pension funds that do business with charities.
She says: “I’d love to see what happens in the investment and charity sector because there’s no transparency there and it is a lot of money.
“One very large charity came to see me once and said they were worried about one of the two fund managers they used. They said their chief executive met on a ski slope with
him and that was it; that was their due diligence.”
Miller also recalls recent analysis exposing the opacity of some asset management firms when reporting their performance figures. Earlier this month, an analyst from Numis suggested performance figures from fund group Schroders had been misreported, though later clarified it was making a wider point about the industry.
Miller argues the FCA should publish a separate study on performance reporting alongside its wider asset management market study, which she expects to report in the autumn rather than the summer.
Miller says: “Among all the things that people buy off, the main buy triggers are price, performance and brand. If you can’t trust performance, how can you make an informed decision?
“It’s a massive problem and I wonder why the FCA hasn’t commented at all on this issue since it happened.”
Miller attributes part of the reason for the industry’s continuing opacity to the “revolving door” of people circling around government and financial services jobs.
She says: “Look back at the Treasury and all the people who went back to the industry from there. They say: ‘Why should I change the culture [in financial services] as that is where my next paycheck will come from?’
“I’ve been saying you need at least a year’s gap before going back in the industry. This would help the industry and stop this revolving back door.”
Miller says her organisation has repeatedly asked the FCA for a lobbying register, and she expects the regulator to face many challenges during the Brexit process. “I hear that the FCA is terrified about all the legislation coming next year because of Brexit. Many people there will leave. If we have a hard Brexit, there are going to have to be different people with different skills because the people who are there now don’t have the right skills in place.”
Miller has many hopes for how financial services will look in the future. She even wants to see Treasury select committee chair Andrew Tyrie head the FCA one day.
Miller does not envisage a career in politics for herself, however.
She says: “I won’t go into politics, although people keep asking me that. I had a lot of offers and some were quite hilarious. A massive sporting organisation asked me if I could be their transparency campaigner. I said even if I had worked for them for 150 years that would not make a difference. People think just because I am a woman I am going to fall for this flattery.”
Miller says she will carry on focusing on Brexit and speaking up about it, especially if Prime Minister Theresa May tries again to exclude Parliament from the process.
She says: “I campaigned on Brexit because literally nobody else would do it and now I am at a stage where I have to make a decision, so I’ll continue to speak up during these negotiations. What have I got to lose now?”