3rd January 2012

Is the relentless impact of regulation making you depressed?

We started to run a new snapshot poll question last month on the above subject.

Over a third of those answering the question said yes and so with the recent very sad death of Gary Speed still fresh in many minds, I felt it was a subject worth exploring. The motivations for suicide of course are in fact tremendously complicated but often include an overriding sense of hopelessness and despair.

Depression is often called the “common cold of mental illness”; Depressive disorders consist of a number of related conditions. Major depression is defined, according to US research, as a period of two or more weeks of sadness and four out of eight other conditions that include the following: (a) loss or gain of appetite, (b) sleeping disorders, (c) fatigue, (d) slowing of body movements or thoughts, (e) feelings of worthlessness, (f) loss of pleasure in one’s activities, (g) difficulty concentrating, and (h) suicidal thoughts, desires, or attempts.

Depression in the workplace manifests itself through changes in performance and behaviors such as decreased or inconsistent productivity, absenteeism, increased errors, reduced work quality, procrastination, missed deadlines, withdrawal from co-workers, overly sensitive and/or emotional reactions, decreased interest in work, slowed thoughts, difficulty learning and remembering, slowed movement and actions, or frequent comments about being tired

Symptoms of depression are known to develop over a period of time. Typically, a sufferer experiences anxiety and mild depressive episodes that may range from several weeks to several months. These often develop into more severe depressive symptoms.

The causes of depression are a very different matter though and with all the changes facing the industry as a whole and IFAs in particular- mostly made up of small business practitioners, it is no wonder that over a third of our snapshot poll respondents would suggest that the impact of regulation upon their lives is causing some degree of distress.

A positive work environment is important and can be a great counter to those inclined to suffer from depression. In deed the FSA handbook spells out very well the FSAs attitude toward having a happy and healthy workplace environment for its staff (not always applied to those it regulates) in its’ Dignity at Work Policy section.

The handbook states “The FSA is committed to creating a working environment where employees feel valued and respected, which is free from harassment or bullying and where everyone is treated with dignity.

It goes on to say, “Employees may become unhappy and less motivated, even getting stressed and ill – potentially affecting their relationships and their performance at work. A few unhappy employees can affect the mood and morale of whole teams, affecting performance and leading to higher turnover and in some cases to legal dispute.

 Interestingly, their policy applies “to all FSA premises and also to any FSA-linked events (for example, working on client sites, business trips or social events)”.

In the past year, IFAs have come under far more intense regulatory pressure and when you are being ‘beaten down’ seemingly every week with bad economic news on top of more diktats from Canary Wharf, this can all become fairly traumatic.

Last week it was reported that  72-year-old retired IFA John Calland who was suing the FSA for harassment, after a 10-year battle with the regulator, the FSCS and the FOS, had an appeal by the regulator for the action to be struck out rejected by the Court. The judge was quoted as saying “I consider that the respondent’s case is better than merely arguable, and that, therefore, it has a real prospect of success, in that it is not fanciful, false or imaginary and I do not find his case improbable.”

In February last year it was reported that IFAs under FSA investigation were forced to undergo a police-style ‘interrogation’ at Canary Wharf and were threatened with losing their permissions if they refused to answer all of the regulator’s questions.

Last year it was reported that the FSA paid out �£148,500 in out-of-court settlements to staff who complained about bullying and harassment. And earlier this year the FSA apologised to an adviser firm for ‘bullying’ behaviour from its own TCF assessors!

So what do hard working, honest and reputable advisers think makes them suffer from depression?

The list could be considerable

• RDR and the changes needed
• Spiralling regulatory and associated costs
• Loss of business value
• Reporting requirements
• Regulatory harassment
• Regulatory threats and bullying
• Fraudulent complaints
• Compensation

Whatever the reason I think that 2012 will see some more casualties and I would hope that the FSA, FCA, FOS and the FSCS adopt the FSAs’ staff handbook approach to those advisers who may be suffering from clinically diagnosed depression.

They should ensure that those they regulate “feel valued and respected… free from harassment or bullying and where everyone is treated with dignity”.

RDR, Panacea Comment