Malcolm Gladwell in his brilliant book “What the Dog Saw,” writes that the more we all try to take the risk out of situations, surprisingly it can often have the opposite effect.

He argues that in fact accidents can occur, whereas popular belief is that all accidents are preventable. Sometimes no-one is to blame.

He quotes an experiment in Germany several years ago. Part of a fleet of taxi cabs were fitted with ABS (Anti-lock breaking) to improve breaking on slippery surfaces. The rest were left alone. The two groups, otherwise perfectly matched were secretly observed for three years. Most of us would expect the ABS vehicles to have a safer record. We would be wrong. Drivers with ABS became more reckless. They consumed the risk reduction, they didn’t save it.

This got me thinking about my own profession. The FCA (Financial Conduct Authority) are forever introducing safeguards to protect the finances of the consumer. All IFA’s know these rules only too well. A whole industry of “Compliance” has grown up around these rules.

Do our customers, the investors’ consume greater risk, because they believe at the end of the day, the system will protect them.

TV and Radio adverts extolling the virtues of the FSCS (Financial Services Compensation Scheme), would certainly re-in force that thought!