The horse meat in beef products scandal appears to be escalating, with the news last week that some beef products contained up to 100% horse meat.
Clearly there is little funny about this story for people who have been duped into eating one species when they thought they were eating another.
What has provided us with a little light entertainment here at Informed Choice are the regular references to the FSA.
In this case, it’s the Food Standards Agency, rather than the Financial Services Authority we are used to hearing about.
Any FSA-based confusion should disappear from 1st April when the FSA applicable to the world of retail financial services is renamed the Financial Conduct Authority, or FCA.
For now though, another factor struck me as similar between the world of food and the world of finance.
When investment products go spectacularly wrong (think Arch cru, Keydata and several others), we often see the complete absence of accountability.
Those schemes that fail tend to have multiple parties involved in their distribution; fund managers, offshore cells, promoters, authorised corporate directors and advisers. And of course the regulator.
Following their failure, trying to pin responsibility on any one party becomes an insurmountable challenge.
Each blames the other for their roles in the management, distribution or regulation of the scheme. The end investor gets a raw deal, eventually needing to rely on the Financial Services Compensation Scheme (FSCS), with those advisers who didn’t sell the investments funding their compensation.
A similar picture is emerging with the latest FSA (‘our’ FSA, not the horse meat FSA) crackdown on the use of Self Invested Personal Pensions (SIPPs) to facilitate esoteric unregulated investment schemes.
Introducing additional parties to the transaction often adds cost and complexity. It usually makes it harder to ascertain who takes ultimate responsibility if things eventually go wrong.
Just like the authenticity of meat in food products, the suitability of investment products should be easy to hold to account.
Too many cooks spoil the broth. This proverb applies equally to horse meat in beef food products and parties in the sale of investment schemes.
Photo credit: Flickr/@doug88888
