Much has been said about public morality, the ethics of professionalism and the virtue of whistle-blowing.
However, to some of us cynics, the official backing given to honest whistle-blowers, that is those who are not speaking out simply to settle scores, must be guaranteed greater protection for putting their and their families’ futures on the line.
Although we will like to think all right-thinking people will not hesitate to blow the whistle on a major injustice, often to take that step calls for sturdy self-sacrifice.
All kinds of people rightly get protection under the law for coming to the assistance of the state, which says quite a lot about the level of our collective humanity, but sometimes we are driven to believe that whistle-blowers are not protected under the spirit of any relevant legislation. They are simply tolerated.
However, the main regulatory, political and legislative concerns with financial products are with consumer protection and one of the key backdrops in protecting ordinary people is the safety net of whistle-blowing. The Public Interest Disclosure Act does not go far enough.
If the regulator, therefore, avoids taking a lead on the design of new products, or at least giving a stamp of approval to them mainly because of the fear of assuming liability, then its claims to be ‘professionalising’ the sector falls flat.
Trust is the most important element in the adviser/consumer relation, and if that is lost, for whatever reason, then it would set the industry back by at least a decade.
And we would all agree that as far as the consumer is concerned, financial services are on the life-support machine.
With pension, endowment and PPI mis-selling, the dark clouds over commission in its new guise, added to grossly bad supervision of Northern Rock, Royal Bank of Scotland, Co-operative Bank, and more, pre-sales approval of new products by the regulator is a small price to pay.
We have previously given the pharmaceutical industry as a good model for financial products, and we repeat it again.
New medicines have to go through a number of legal/regulatory hoops before they are passed as fit for human beings.
They first emerge from the primordial soup of research and development, then are tested on animals or a non-human substitute, then go through trials with volunteer humans, then are permitted.
They are allowed on to the market under strict conditions, including those products which can be sold in corner shops and supermarkets without conditions, those that can be sold but the seller must first ask if the buyer is taking any other medication, and those that can only be sold under prescription.
Throughout their lifetime these medicines are carefully monitored and any negative reactions, early or late in their usefulness, are reported to the appropriate medical authority.
Another good example is the motor car industry, in which the new vehicle is designed and road-tested under strict regulatory conditions.
