How to make enemies and influence people

When the powers-that-be drew up Colette Bowe's job description as chief executive of the Personal Investment Authority, top of the list of requirements must have been a broad back, strong enough to handle the insults likely to be hurled at her.

Second on the list had to be a steely determination to get her way in the male-dominated world of financial services. Third must have been the charm needed to do so without, in most cases, people realising they have just agreed to the very opposite of what they had first argued.

Bowe has those qualities in spades. What's more, she is sharp - razor- sharp. But then, she has to be. At the PIA, she has the kind of job no- one takes on unless they are prepared to give up the quiet life for a while.

The newly formed financial services watchdog, with Bowe at the helm, is charged with cleaning up an industry much reviled for its alleged foot- in-the door tactics.

In doing so, she has earned the ire of independent financial advisers, who have always seen themselves as superior to mere insurance salespeople because they don't simply sell one company's products.

Two weeks ago, the PIA issued guidelines on the way its 5,000 member companies, both large and small, must contact any clients advised to switch their funds out of company pension schemes and into private ones.

They are being told to ask them if they believe they have been badly advised and of their right to have the matter reviewed.

IFAs believe this is a sure-fire way of inviting an avalanche of compensation claims, unfounded or not. If that happens they would be forced to go bust because their indemnity insurers will not meet the claims. Not surprisingly perhaps, comments about Bowe from some of the IFAs she regulates can be vicious, in a few cases astonishingly mysoginistic. The IFA Association, which represents advisers, is contemplating legal action to force the PIA to back down.

If she is at all fazed by her critics' insults, Bowe does not show it: "What we are doing is necessary for investor protection and if that means that people are going to be antagonistic, then so be it. We feel we've tackled it right.

"We've consulted the industry. We've done a good job of producing a workable guidance for our members and if they feel that's a problem, then members will have to be educated.

"I am concerned about driving people out of business. That is not what I want at all. But on the pensions issue I think our guidance will not have the adverse affect that is so widely predicted."

As far as indemnity insurance for IFAs is concerned, if they feel their cover will be affected by contacting their own clients, the work will be done for them by the PIA's own pensions unit. "We have taken legal advice on this and I am convinced that indemnity will not be affected."

The pensions battle she has embarked on is only the latest in a line of high-profile jobs which Bowe, aged 48, has held.

She first acquired notoriety in 1986 as the senior civil servant accused of leaking a letter highly critical of Michael Heseltine's case in the Westland helicopters affair. Bowe was cleared by a Commons select committee inquiry of any wrongdoing.

For five years until being appointed PIA chief executive, she was group director in charge of retail regulation at the Securities and Investments Board, the leading City regulator. What were her priorities on taking over this job a year ago?

"One was to get the show on the road, as far as the PIA was concerned because it was then still very much a new entity," she says. "The other big objective was to devise a content and style of regulation that was workable for the incredibly wide range of members that we have. The PIA has about 5,000 member firms, from the smallest trader to the largest institutions.

"In terms of content, we had to run an admissions process that was rigorous. Secondly, a big step change had to take place in training and competence of members."

In the past year, the PIA has made it mandatory for all sales staff and advisers to pass an exam, the Financial Planning Certificate.

The FPC has come under fire for not being tough enough, but Bowe defends the decision not to immediately ratchet up its standards: "I would quite like to see how the new PIA training scheme beds in before we start changing it.

"In any event, no letters after your name are ever going to be a total guarantee of competence any more than they are a guarantee against fraud.

"Improving competence involves continuing professional development, or CPD. That is the really crucial thing, not just passing an examination."

If training does not prevent fraud, what can be done to stop it? "We can have tough admissions policies, continuous monitoring and rules to prevent fraud. But the reality is that no regulator can hold itself out as being a guarantee against fraud, as we have seen in Singapore."

As for the style of regulation Bowe wants, she aims to shift the PIA away from mere monitoring visits: "What we ought to deliver is something that adds value to the member. That means what we want from firms ought to be what they want for their own clients."

So, fewer visits where boxes on a piece of paper are simply ticked and crossed? "An integral part of what we do is akin to an audit and you can't just have a five-hour chat with the managing director. You have to do a careful examination. But we can also advise and help firms to improve things, helping their clients at the same time."

Among the PIA's urgent tasks this year will be that of resolving the pension problem. Many people within the financial industry are hoping inertia wins the day and that few clients will reply to the letters they must send out. Some sources believe the potential £3bn-plus compensation bill could drop to £1bn or less as a result.

If so, they are in for a rude shock: "I believe we have the right package to meet the problem. However, if we find that inertia takes over then we will act very quickly. I can't sit here on my bottom running an investor protection agency and say `No-one's replied to the letter that's been sent out but that's OK'."

On the other hand, companies will not have to reinstate someone into the old pension scheme if costs are too high: "It is conceivable that trustees will quote enormous re-entry costs into the old pension fund. If a life office can demonstrate that the costs of reinstatement are unreasonable then it has the option of topping up the client's personal pension."

No matter what happens, Bowe knows the public's confidence in the industry has been badly dented: "I recognise that picture. Ironically, the timing could not be worse for the public. It is quite clear that people should be encouraged more to make provision for themselves and not rely on the state.

"But to be honest that is more of a concern not for me as a regulator but for the various industry trade associations whose job it is to represent their members' interests.

"For my part, I want people to feel they can go into a clean market-place, where they can get good service. Which is why we have got to make a good job of clearing up after the pension mis-selling problem. Doing that is part of the process of winning back that confidence."

Nic Cicutti