The Stuff of Nightmares
(John Henry Fuseli, The Nightmare, Detroit Institute of Arts)
The Swiss artist, Henry Fuseli (1741-1825) was the second of eighteen children, and the son of a portrait artist. Even in a day when families were larger, due to high infant mortality, eighteen children seems an enormous commitment. Initially training for the church, Fuseli came under the influence of Sir Joshua Reynolds, who encouraged him to devote himself to his art, working in Italy from 1770 to 1778.
Fuseli lived and worked during the Enlightenment period, one characterised by a focus on rational thinking, empiricism, and the overthrow of authority, especially the kind of authority exerted by the Catholic Church. It's strange to see, therefore, that his paintings tend to be preoccupied with the supernatural and mystical - and this, perhaps his most famous, was painted in 1781, conveying the suffocating and terrifying sense of a nightmare from which one cannot escape. Even in the midst of all that much-vaunted rationalism, there is powerlessness, human weakness and a fundamental inability to deal with the raw data of our existence.
Last night, I dreamed such a dream. The FCA, in its infinite wisdom, had decreed that all Advisers must retake their Diploma exams on an annual basis. I found myself in an examination room, and was handed my exam-paper, which was of the multiple-guess format, much beloved of the PFS. I had two hours to complete the job, and was fairly relaxed about it...until the interruptions commenced. A PFS representative wished to interview me about my thoughts on the process of annual requalification. Some new students arrived, and I was asked to move to a different table - which, being an accommodating sort, I did. Then my wife appeared with a query about a shopping list. I discovered that I had inadvertantly arrived in my pyjamas, and then found that I no longer had an exam paper to refer to, but instead a dozen sheets of scrap paper which looked as if they had been enthusiastically chewed by mice. Each successive revelation ratcheted up the stress level, and ate up 15 minutes of the allotted time. Needless to say, although the dream did not end, the conviction was slowly dawning that I would never get to complete the paper.
Thankfully, I woke up, exhausted, before the final, depressing denouement. No doubt a decent psychiatrist would make much of such a plotline, but it did strike me that at the heart of the thing, was the essentially debilitating nature of passivity, in a world which seeks to dominate how we dress, what we believe, how we choose to spend our money, and how we go about the challenging business of...business. This week, I completed our initial analysis of the FCA consultative paper CP17/16 ('Advising on Pension Transfers'). The machinery which produces regulatory guidance runs on high-octane fuel, and it never, ever stops. It always strikes me as odd that, within a culture which is essentially self-congratulary, continually telling us what good people we now are, that the need for new regulations and rules is apparently inexhaustible - but irrespective of the justification, this is now an inviolable part of our lives.
In this matter, it is all-too easy to adopt the passive approach, to wait, wearily, for the next barrage of demands - and then find ways of implementing them. No doubt there will be times when this is the natural and overriding approach: MiFID II is a-coming, whether we like it or not, so let's just grin and bear it. Or bear it anyway. But perhaps there is a better way too. In respect to Pension Transfer advice, what we have sought to do is think carefully about how the advice model ought to work, if it is to generate the best outcomes for both client and Adviser. As ValidPathers will know, we have set up our Pension Transfer Affinity Group, established a consensus, shared ideas and insights - and, generally, moved the model on in the right direction.
And here's the magical thing: 95% of what the FCA is proposing in CP17/16, we have already done. Apart from updates to software (and those are largely out of our hands), plus a review of our process, we're pretty much there. And none of this would have been possible apart from a group of excellent financial-planners which are prepared to work together in a collegiate manner. There are no nightmares in store for ValidPathers.