This was, of course, vaguely ridiculous. If anyone else is unfortunate enough to have taken these dreaded exams - as several of my colleagues here at the IC also did - they will remember that passing the SFA 'Reg Rep' was a painful exercise in rote learning that did little to prepare one for life on the markets. Much of what was squeezed into our heads to pass that multiple choice exam was quickly squeezed out by the useful information that came with actually doing the job of equity analysis.
In short, the letters attached to my name were, in themselves, certainly no guarantee that I was fit and proper to do the many things the SFA exam let me do - in fact my own financial education only really started the day I left that exam hall, and has continued ever since. Experience is far more valuable than two weeks spent swotting for an exam as part of a regulatory box-ticking exercise.
That’s one reason why we strongly believe that financial consumers should be free - within, of course the confines of a sensible legal framework to make sure that they or markets are not flagrantly abused - to make mistakes, because that is part of the valuable experience that will make us better investors. All investments carry risk, and even in the most highly regulated market some investments won’t work out, while over-regulation arguably creates a false sense of security that encourages investors to take risks that they otherwise would not.
At least the FSA has seen sense when it comes to venture capital trusts, the tax efficient investments that we’re looking at in depth in this week's cover feature. It now won't be implementing plans to restrict their distribution to individuals, which is good news for tax and income squeezed investors, good news for the legion of smaller companies that rely on them for funding, and good news for anyone looking to gain exposure to some of the fastest growing companies in the UK.
Better still, it's a victory for the notion that private investors do not need to be wrapped in cotton wool - we do not learn by being coddled, nor are we always especially well protected by regulation, as anyone who owned shares in British banks would concur. Regulators, like any human beings, don't get everything right - who, after all, watches the watchmen?
