Why we are all regulators

scams aware

A regulator is generally a device that maintains a designated characteristic in a system. In a financial sense, it ensures that the rules that govern our dealings are understood, maintained and enforced.

We have regulation because we value a system and want it maintained. If we did not, we would have a different law, a law of the jungle. To make sure that a financial system is maintained, we set up compliant controls and processes to ensure we are playing by the rules and we contribute to the more general rule setting through consultations and feedback.

I had the chance to give some feedback to the Pensions Regulator last week as it looks to understand how well small pension schemes are regulating themselves.

In another context, I wrote yesterday about how two characteristics of our pension system (Pension Freedoms and DB schemes) are under threat from poor behaviours from a recently formed Swiss Consultancy.


There is a self-governing mechanism in most industries which manifests itself in its institutes, livery companies and formal regulators. More recently we have had the phenomenon of social media which has allowed ordinary practitioners (workers) to say it as  they see it. This informal journalism will get picked up by formal journalists and filter up to those in Government.

Indeed progressive journalists now take the temperature of their readers by republishing tweets and other social media posts, and by soliciting polls on topical issues, the results of which are available within hours.

This process can register approval of a system that works or (more generally) disapproval where a designated characteristic of a system has broken down. In as much as we all have access to social media, we are all able to provide the informal feedback that shapes our regulation. We are all regulators.

We cannot abolish fraud

The “us” and “them” aspect of regulation which I grew up (Spaghetti Westerns, Z-Cars, Crown Court) emphasised that law-enforcement was something that happened formally and was best left to experts.

Formal compliance departments reinforce this. Money laundering regulations are strong against “tipping-off”,  where whistles are blown in public.

I feel uncomfortable about this professionalization of regulation , but can quite understand why it happens. The cops and robbers view of regulation requires the baddies to be caught with their trousers down.

But this assumes that there are a finite number of baddies and that a campaign against them, such as the Pension Regulator’s Scorpion Campaign, can be won. Sadly, we are no more likely to eliminate financial fraud than we are to win the war on terror. The best we can hope for is that we protect our borders and make sure our bit of the system is fraud-free.

We can only dis-place bad practice.

The majority of fraud committed on our pension system originates from outside our national boundaries. Boiler-room scandals have for decades used the phone to sell penny-shares from continental havens. The web merely expands the geographical spread of their activities, it is as easy to be scammed from Phuket or Moscow.

Certain countries, which have a reputation for secrecy and low taxation, are particularly prone to financial crime;  Switzerland , Monaco and other tax-havens have the added glamour from the foot-print of the super-rich.

But as Christopher Lean commented yesterday, a legitimate manufacturer can exploit regulatory loopholes to legally distribute a toxic product where 1+1 = <2.

Of concern to me, apart from the obvious points raised in the article, is that there will be a SIPP firm that is facilitating this “lifeline” to the one-trick pony QROPS firms, masquerading as IFAs. Rest assured, some bright sparks will be looking at how to exploit any loopholes after the Budget.

To publish or report

There is a small body of people, most prominent Angie Brooks who are doing their best to rid expats of the threat of pension liberation fraud. This is how Angie publicises the problem on linked in

There is only one thing to say about pension liberation fraud: it is wicked. Dishonest, fraudulent and nothing that any true professional financial adviser would ever consider getting involved in. The victims lose their income in retirement and end up with crippling tax liabilities. Pension trustees in the UK have got to wise up and help stamp this scourge out – because currently they are still handing over innocent victims’ pensions without due diligence.

Angie is fighting a personal battle, but she has many followers and she can count me among her fans.

I do not think that the Pensions Regulator are such fans as they see her as a vigilante. But the scope of tPR is limited and even with the co-operation of other regulators, the capacity to act against fraudsters operating outside our national boundaries is limited.

Angie disrupts the fraudsters by bringing them to our attention, the circle of fraudsters who are behind the scamming is small , the wider group of advisers who are living out the pre-RDR dream of smashing commission targets , are for the most part doing themselves no favours. As always , they are lining the pockets of the owners.

Angie’s focus is on the victims – and protecting them. Whether tPR likes it or not, she is more trouble to the scammers than the UK authorities can be. Without her Trustees and ordinary members with UK rights might never know. Her website Pension Life, is an invaluable resource – as this Scamogram from a couple of years back demonstrates.Scamogram-Oct-2016.jpg




We are all regulators

The traditional societal view of cops on one side and robbers on the other, assumes that we sit in the middle, passively accepting that “shit happens” and when it did, it is someone else’s job to clear it up.

But that is not enough. Angie Brooks, Christopher Lean and others should be embraced as part of the solution and not ostracised.  (and Anglie – you might have to stop referring to  A-WT as  Tinky-Winky!)

Not only are we all regulators, but we must work with those we pay to educate us and protect us. Angie needs enforcement as much as tPR needs her intelligence.

Publicity is critical, though Action Fraud would like hegemony over information, the issue is about flows of capital out of the UK pension system into overseas arrangements today!

We are all regulators.


Angie Brooks   https://www.linkedin.com/in/angela-brooks-69825556/


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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