31 Mar 2010
Shangri-la has become synonymous with any earthly paradise but particularly it is known as a mythical Himalayan utopia - a permanently happy land, isolated from the outside world. In the novel Lost Horizon, the people who live at Shangri-La are almost immortal, living years beyond the normal lifespan and only very slowly ageing in appearance.
Well, that was James Hilton's version; I think that the FSA may have another version but that earthly paradise is now centered at Canary Wharf.
You will recall that recently we made Panacea members aware of the fact that FSA directors were ignoring their own rules and using your hard earned regulatory fees in the best possible way by exceeding their own clearly defined handbook expenditure limits when staying at hotels both in the UK and elsewhere.
Given the recent debacle within the MOD and the directive that from Generals downwards, only second class rail travel can be claimed for under newly formulated expenses rules, and that proposals for MPs' expense claims will be subject to similar capping constraints, the recent FOI request reply from the FSA does little to dispel the view that the FSA is not appearing to care whether or not it adheres to its own rules, yet alone having any regard to what might be considered by some today as excessive.
So, to recap, the FSA Employee Handbook explains that ALL EMPLOYEES must limit their hotel expenditure to £150 per night in UK, £170 in Europe and £250 in the US.
You will see in the link below that some very senior FSA directors primarily use 5 star hotels. Brief searches of other hotel costs in the same areas have found four-star hotels at less than half the cost.
You will note that the Marriott at West India Quay is a popular place to adjourn to, premiership footballers certainly would agree. But, why it is necessary for those working at the FSA to stay in a hotel adjacent to their place of work in the first place is open to debate. This is a 5 star hotel yet even closer to their offices is the Britannia International Hotel at a fraction of the cost.
Given that our bulletin issue 140 advised that the FSA reckons its new policy of increased fines for wrongdoing is part of its principle of credible deterrence through imposing harder hitting penalties that reflect the scale of a firm's wrongdoing, what is the sanction for those employees who break the FSA's own rules as laid down in their own staff handbook?
Many thanks to IFA Alan Lakey of AdviserAlliance for his tenacity and hard work on research. We are living in times where public spending excess is under the spotlight and clearly frowned upon. Expectation is high that those in public office no longer dine out finely at the taxpayer's expense.
The financial services industry has suffered thousands of job losses over the last year or so, very many of these as a direct result of regulation for regulation sake that has not withstood too much cost/ benefit analysis. Unless you see this as the cost benefiting the regulator.
I think the time has come where those involved in the boom industry of "Regulation" show similar constraint and respect toward those who, at the moment, fund what could be considered by many IFAs and Product Providers, an excessively lavish lifestyle at the expense of those it regulates. If a 5 star hotel costs more than the allowance then why not simply have that person pick up the tab for the difference?
You will note that the above claims do not appear to include subsistence and travel costs.
More caviar anyone?
If you feel like a break to get over the shock of all this excess, click on the links below for the latest "get away" rates at these FSA preferred hotels.
Four Seasons Washington
The Palace Hotel New York
Marriott Hotel West India Quay
The Hay Adams Hotel
Grand Hyatt Hotel Hong Kong
Pudong Shangri-la Shanghai
Hotel Bayerischer Hof Munich
Hotel Okura Amsterdam
The Ritz Carlton Doha
The Ritz Carlton Bahrain
Conrad Hilton Hong Kong
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