So this HBoS thing. What kind of journalist could really have found out what was going on? None I think. Unless an Irishman, an Australian, an Englishwoman, an analyst (well maybe a US-based one who understood mortgage securities (scrub that actually), a former, reformed trader who had found God perhaps, a forensic accountant (any gender), a compliance expert (and a lawyer to deal with the privacy and libel stuff) got together and surveyed the whole bank to find out what was going on. It’s just not practical even with Google+ to hand out in and discuss matters. So it’s back to isolated journalists or news desks.

For example, UK journalists could question the lending policies or the market share. I did. No really. Many journalists did. Well we asked, but did we arm ourselves with the correct financial information beyond the blunt “What about the fact you have almost a third of the mortgage market?” Tricky you see, when institutions are so vast.

“Well, HBOS would  say, we are managing that market share down a little bit, prudently of course. We are now building our share of investments and savings to our natural market share.” Blah. Blah. Etc.

So could we find experts to help – experts who understood mortgage funding and the quality of mortgage backed securities. You see we were told about that too but it was tricky to write. Some very small sub prime lenders were protesting the strength of their mortgage books days before they crashed, sometimes even after tranche one had hit the rocks, they were still protesting about how tranche two was different. Indeed, some journalists warned about overheating in the institutional market. But really was it anyone’s main business? Did any paper run stories on the front page? Actually I do recall Abbey getting a front page pasting for its lending policies but not HBOS though I could stand corrected on that. And imagine if any title had written even one tenth of what said by the Banking Standards Commission in its report today in a newspaper or magazine. Guess what. They would have published and been damned. Utterly damned. (Something Lord Leveson possibly missed while he was listening to Hugh Grant. Oh well.)

So journalism probably can’t catch this sort of thing. Not even outstanding journalists like Gillian Tett or Robert Peston. So it’s up to regulators or the market. Oh dear.

Given regulatory boss Martin Wheatley’s comments about interest only mortgages this week, I have found myself wondering what those who may feel themselves at risk of being caught out could do. There are suggestions on some of the trade comment boards that the FSA mortgage crack down has trapped this group further which surely is something the FSA needs to keep monitoring and adjusting its regulations for.

Of course, this group could seek the services of an IFA though that might cost quite a bit because it requires an assessment of a host of issues. Everything from a fact find of the borrower’s and their family’s finances to what their plans are for living in the house long term, what the options for downsizing and a question of whether they dare select an investment plan to run alongside the mortgage. There are a host of advice pitfalls but it seems that advice is what is needed. However except for those paying a fee, I struggle to see how the current regulatory set up will allow them to be advised in a cost effective way. And whatever else they can do, they won’t be able to sort things out on an, ahem, execution only basis. I wonder if this issue is covered in the exams?

Meanwhile on FundsNetwork, I suggest that the Retail Conduct Risk Outlook from the FSA actually may show them getting to grips with things. You may beg to differ. There is of course scope for your opinions on this site. Feel free to supply them below.

In this week’s Investment Adviser I wonder if it might be better to adviser charge the legacy business and if you do why exactly would that be 0.5 per cent?

Finally here is the week’s news round up on Adviser Home – Hector, RCRO and all that jazz.