Was chatting with a friend who used to run quite a successful events company…I say used to because he has been directly impacted by the “conflicts of interest” legislation in the financial services industry. As a result of the legislation, companies can no longer “wine and dine” their clients (that is the financial advisors and brokers who represent them).
I understand that the intention behind the legislation is to attempt to prevent advisors being unduly influenced by the product providers who have traditionally spent quite a bit of money in this area. But the response by the regulators is rather “draconian” and is, in my opinion, a complete overkill which has had significant unintended consequences for a lot of small businesses in the hospitality and entertainment industry…there are no more golf days, team building events etc…and there are a lot of small businesses out of business…
So what about the following idea as an alternate proposal?
Companies can publish a register on their websites of who they have “entertained” and the value of the item and any prospective client who suspects that an advisor/broker is offering them a product at a particular company because that company is “incentivising” him/her can simply search the database of that company to verify this. All the information is currently being collated by the compliance departments at the companies so it should be a very easy step to publish a register – that way you can allow the industry to self-regulate and still have complete transparency.
If I have no scruples as an advisor then I can accept as many invitations/incentives as I like from the company and all this information will be available for any client (member of the public, regulator or journalist) to check…you can be sure, however, that any advisor with any bit of integrity will give serious thought to appearing on any companies database…
Any thoughts on this?
