We all used performance enhancing drugs at some stage?

It is a fascinating debate around Lance Armstrong, did he or didn’t he take drugs? Many riders have come out in support of him saying that whatever the truth is it cannot take away what a remarkable rider he was coming back from cancer to achieve what he did. Although there might be a slight stain on his character his legacy will remain whether or not you take away his awards. The point one rider made was that what happened then happened then but what happens now is very different.

This made me think about the comments made in the Daily Telegraph and my recent blogs around the subject of backhanded rebates. In the past it was common practice to take hidden commissions, and many successful businesses which we admire today were built up on the back of it. Effectively assuming Lance Armstrong’s guilt are they really any different to him. They took what was available to them at the time and whether ethical or not built up the businesses we admire today. We can strip them of their awards but ultimately we will always look at those businesses and aspire to grow like them.

But the point is that that was then, the now is starting to look very different. Yes, there are still some financial planners taking performance enhancing commission but come 1 January with the exception of legacy business this will have to stop and very different practices will appear. In fact we are already starting to see these businesses. 

However, unlike cycling where the clean-up has been immediate it is being phased for financial services. For financial planners legacy business can still be dirty and how long (if ever) it takes for all of this to be clean is anyone’s guess. But worse still there is a difference between what you might class as the professional riders and the amateurs. With the professional riders i.e. the financial planners this change is from 1 January. The amateurs who I would I class in no derogatory terms as the direct businesses this is very different. 

For the amateurs who want to build their own investments they are still in the dark thinking they are getting something for nothing whilst the trading platforms they use continue to take performance enhancing fees and can continue to do so until 1 January 2014. Potentially if the clients do nothing then this healthy fee can continue for ever. To be fair as I have mentioned before some companies have moved into the clean no drug taking world but they are the minority and a lot of the well-known big companies have not. 

The biggest guilty part of this mess is the FSA; four years ago they could have said stated a position and stuck to it - the people’s champion, however they didn’t and they leave behind a mess. From a supplier point of view there is too much fighting between companies.

Ultimately all rebates or as I like to think performance enhancing fees should either be banned or paid directly to the client. These changes shouldn’t be staggered and should apply to everything and everyone from 1 January 2013. A bold statement but someone has to say it.