After some confusion between a financial regulator and a hamster, the chairman is concerned about the FSA’s assumption that consumers cannot understand ‘complex’ financial products.

“Have you heard Adair howling at the moon recently?” asked the chairman of the implausibly-sized investment company Second Coming Asset Management as we met for a few pints of Every New Office Should Have An Internal Waterfall at The Bad News For Middle-Aged Bladders. “Why can’t the wretched creature keep his mouth shut?”

“I’m surprised it still bothers you,” I shrugged. “It’s been going on long enough.” “But he’s not making any sense,” the chairman protested. “Of course, he’s not making any sense,” I replied. “He’s a hamster – albeit a fairly unusual hamster in that he’s the size of a small terrier and has been living in Scam’s air conditioning system since he escaped 65 weeks ago.

“Nevertheless, bearing in mind his own standards of behaviour – not to mention the fact that his habit of sitting on the roof of your office building and howling at the moon dates back to your previous premises, before you captured him long enough to bring him to your new place and promptly allowed him to escape once more – I’m surprised he’s provoked such a reaction in you.”

“Kudos on getting the Adair the giant hamster recap down to a single, albeit unwieldy, paragraph,” replied the chairman. “However, I’m not talking about my granddaughter’s pet but Lord Turner of Ecchythump and his new-found zeal for taking pot-shots at the way Her Majesty’s financial services industry operates. Life at the moment is quite complicated enough, thank you very much.”

“I know what you mean,” I nodded. “And ‘zeal’ is quite a good word for the way he appears to have taken to the task. Still, you have to admit he’s got a pretty tricky job on his hands.” The chairman stared at me open-mouthed. “Who … are … you?” he stuttered eventually. “And what have you done with …” “Yes, yes,” I said. “Thank you for the very old joke.

“But I reckon I have a point. Maybe not on the whole dissing the City thing. After all it seems to me if you happen to be chairman of an organisation that regulates one of the few industries Britain still has a reputation for, then – no matter how much it may have messed up of late – you still have a duty to balance making sure that never happens again with having a chance of remaining a world leader.

“While we’re on the subject of balance, though, take a look at this whole issue of the FSA’s regulatory approach to balancing the responsibilities of consumers and firms. The latest feedback statement contains the acknowledgement that ‘the responses reflected a variety of views and there was no consensus’, which is a line that presumably features in any FSA summary ever written.

“Anyway, as such the FSA says it will maintain its current approach as set out in the original discussion paper, which seems to be accepting that, while there should in theory be some sort of attempt at balance, in reality consumers cannot be expected to begin to understand anything so complex as a financial product or indeed to even think about trying to.

“This stance has found much favour with the Financial Services Consumer Panel, which has apparently argued that the concept of consumer responsibility is flawed. Presumably the panel must have some technical definition of ‘consumer responsibility’ however, because otherwise surely that statement itself is flawed.

“As we discussed only recently, research from the good, good people at Brandspeak found that every second consumer signs financial product forms stating they have read and understood terms and conditions when they have either not read them or have read them but didn’t understand them. In short, what’s the endgame here?” “Call that short?” replied the chairman, rather unkindly.

“The way we see it, there are ultimately two possible outcomes if we accept the idea of caveat emptor no longer exists in this business – either any financial product more complicated than a bank account is eventually banned or we providers acknowledge at the point of sale that we will be automatically and entirely to blame should a punter ever feel unhappy with their purchase. I’m betting on the latter.”