Calling Feck

Did you see that programme about the pensions Investor (it was Panorama or Dispatches or similar). Some schemes 80% of the profits were going in charges. If the fund manager transferred the fund from one group of guessers to another group of guessers charges were being made on top of their usual no risk bonuses if they made a profit. Parasites.

BTW the tote should adopt this. Boost pools by giving those who place bets through the tote site cashback equal to the commission they pay tote direct terminals.

I haven't seen that feck. I find this situation very strange though. I thought a financial adviser's job was to seek out the best and most appropriate deals for their customers. Instead, they are incentivised to flog the financial products that give them the biggest commissions. A massive conflict of interests if ever there was one.

I have an investment product as part of a mortgage I have abroad. Instead of paying off the mortgage, the money is invested with the idea that appreciation will outstrip mortgage interest rate. For the first 5 years a rather large part of the money I 'invest' is paid the the adviser that set it up for me. Fair enough I thought, even though the charges seemed extremely steep.

What really shocked me though, is that next time round if I go direct now that I know how it all works, I'll still have to pay the fees, the mortgage provider will just take the cash for themselves rather than rebating it! So it is impossible to sidestep the adivser, even if you know what you are doing. That is just shocking.

The rip off fees involved with buying property are staggering, yet people clamber over each other to pay it. I can't stand financial advisors, solicitors, estate agents, but worst of all has to be so called compensation lawyers, their greed knows no bounds. Thanks to them we now live in a culture that rewards liars, fraud and incompetence on a massive scale.

Totally agree Investor. If you're going to invest in anything to do with the stock market do your own guessing. Fk having to pay some useless parasite for directing you to the guessers who will give him the most compensation.

Trev, one of those programmes also did an expose of lawyers dealing with wills where the deceased had left all their money to a charity. The fees were astronomical but in many cases they weren't even passing the money on to the charity unless the charity knew about the bequest. Re compensation lawyers, those people claiming the councils for loose paving stones are ripping off council tax payers for 3 or 4 times what they get out of it courtesy of the legal "fees". The number one industry in Britain is white collar legalised (in most cases) fraud. The government are quite happy for it to continue provided they get their slice of the action.

If you incentivise people to do something, why should we be surprised when they react by doing what they have been incentivised to do?

Last night, Gerry Robinson in a Panorama investigation into the NHS reforms uncovered the fact that certain hospitals always adopt certain investigative procedures because they are paid to.

Hardly a surprise as our GP's receive bonus payments to lower blood pressure and cholesterol levels amongs their patients (customers!)the consequence of which statins are prescribed willy nilly despite the concerns about worrying side effects.

When I was a child I realised that the number of fillings I got (a lot) was somehow related to the fact that dentists were remunerated according to the number of fillings carried out.

So, it's not surprising that financial advisors push products which earn them the most money. It's not surprising that politicians favour investment projects that benefit their constituents or that political parties try to buy votes by piling money into say the State (e.g Labour).

Who benefits? is the question we should always ask . "Follow the money" as Deep Throat said.

As PC1/2 is a penalty system, as opposed to an incentive system, what behaviour might we expect, I wonder?

I agree Sandown. My key observation: You need to have the right incentives in place, and equally important, you need to have a system that is 'difficult to game'.

If a system can easily be gamed, many will do so. Blaming the people that engage in morally dubious behaviour is not even worth it, because it is just a given that they will pop up as soon as they are incentivised to do so.

A popular sport, a liquid tote pool, minimal takeouts, punitive regulator enforcement of rules and pot rebates for the big players seems to me the optimum betting set-up. This is for recreational punters wanting an interest and professionals alike.

Bookmaker arrangements are susceptible to a much greater degree imv to players gaming the bookie, winners systematically stiffing losers and losers falling out, and the decline of markets thru 1) the perception of unfairness, and 2) failures between those making a profit from the game (the operator/bookie, different styles of winners) to agree to any way of cutting up the winnings.

You then get situations like bf wanting a greater share of winners' winnings (or losers' losses) and being prepared to drive away custom to get this.

And Trevh, we have to live in a world that is straightjacketed by stupid t&c in order to protect our providers against them.  And who creates the t&c, more solicitors!