TANNED and tousled, oozing hot-off-the-boat good looks, John Tiner seems the
least likely financial regulator you could meet.
Assured, chatty, a pocket dynamo of blokeish enthusiasms from tennis to Leeds
United, he presents himself more like an adman than chief executive of the
Financial Services Authority, a slot he’s held for four years and which he
leaves this week.
Demob happy? A bit, perhaps. Tiner gave a valedictory speech earlier this
month that surprised a few when he lambasted insider dealing in the City. He
also called for tougher penalties to catch the perpetrators.
“It’s hard,” he says, sitting in his open-plan office in Canary Wharf. “Just
look at all the people involved in transactions these days, you see insider
lists that are vast.”
So why hasn’t the FSA done more about it? It will, he promises, if his
successor gets the tools needed to put people behind bars. Some say that
until a high-profile name is prosecuted and jailed, few in the City will
take it seriously.
“Possibly,” says Tiner, when I run that theory past him. Then he adds that he
isn’t saying that insider trading is getting worse, just that there is still
a lot of it about, and with derivatives and complex products, it’s getting
more difficult to trace.
Ah right. He shifts awkwardly. Short and chunky, aged 50, Tiner looks like
Jonny Wilkinson’s stockier sibling, and talks like an actor, flush with
likeable plausibility that sometimes requires a little unpicking.
A former high-flyer at Arthur Andersen, the accounting giant, he has had an
up-and-down four years at the top of the FSA, handling a job that, frankly,
is never going to win you any popularity polls.
He has been praised by many for the way in which he has tried to push
regulation away from the rulebook towards a more principles-based approach.
But he has also been criticised by some for not being tough enough with
offenders.
The debacle over split-capital investment trusts was just one where investors
felt short-changed. Tiner was accused of acting heavy-handedly, then lacking
the clout to bring miscreants to heel.
Then there was his personal health. Tiner took three months off to fight
prostate cancer in 2005. He later bounced back to work, but it cannot have
been that easy.
He is certainly a change of style from his predecessor, Sir Howard Davies, who
first pulled the Financial Services Authority together and then ran it as
executive chairman.
Davies, ex-McKinsey, now head of the London School of Economics, was rumpled,
spiky, grammar-school Oxbridge – confident enough to oversee all decisions
even in a sector as hideously complex as financial services.
Tiner, by contrast, never went to university, and worked his way up at
Andersen, servicing international banking clients. He is, you sense, more of
a polished hand-shaker and professional manager than Davies ever was, though
less of an accomplished speechmaker. He is also deceptively smart. An expert
on derivatives, he was called in to advise the Bank of England on the
Barings collapse. There he caught Sir Eddie George’s eye, and he was later
lured to the FSA to be head of consumer, investment and insurance. In 2003
he took over the top job.
Since then he has adopted a rather lower profile than Davies ever had, partly
the result of a split in roles – with Tiner operating as chief executive and
Sir Callum McCarthy appointed as chairman – and partly perhaps as a result
of that brush with illness.
Tiner also felt bruised from a press interview he gave early in his tenure
that portrayed him as a pint-sized Porsche-driver whose T1NER number plates
told you all you needed to know about the man. After that, he stuck to work.
“Yeah, the press did have a swipe at me, it was mainly around the car. I drive
a Suzuki Jimny now,” he smiles.
The Porsche, however, is still in the garage, and Tiner will have plenty of
time to polish it in the six months’ fully paid gardening leave that he’s
about to start. That’s what an outgoing FSA boss gets to prevent any
conflicts of interest should he jump straight into a big business.
As for his time at the FSA, he has – no surprises – already prepared his own
overview of what went well, and what didn’t.
“Three things we’ve done well: we have completely transformed how the
insurance industry is regulated. It’s now a stronger, more transparent
industry than ever before, better capital, more secure.”
“Secondly, we’ve made consumers more confident about money. We have a
statutory responsibility to promote public understanding of financial
services, and we’ve now got people in the workplace talking to workers,
websites – loads of things happening around the country.”
“Thirdly, we’ve moved the regulatory system off a rules-based approach to what
we call principles.”
That, he says, allows regulators to step back, and gives companies more
flexibility. “You encourage them to operate fairly and properly in the
market but you don’t tell them how to do it.”
The risk with following that course is that if you do take legal action under
a principles-based approach, lawyers then have a field day discussing
interpretation. Tiner shrugs. “We’ve had a number of cases taken on the
principle basis and we are pretty happy we can get those cases away.”
And what has the FSA not done so well? “Identifying and cracking market abuse
like insider trading.”
Which is what Davies was criticised for, too. Perhaps insider dealing cannot
be cracked?
“No. I want bigger penalties and the power to enter into plea-bargaining
arrangements,” says Tiner. “If there is somebody who has evidence that could
make a case stick, then we should be able to offer them immunity. The SEC in
America has that power. I hope my successor will get it.”
Has the growth in private equity and hedge funds made it worse? “Not on their
own, but it does increase the number of people inside the tent, and
transactions are getting more complicated.”
He also agrees that more needs to be done to monitor smaller firms on the
retail side. A review is working its way through the FSA that will, he
promises, scrutinise how independent financial advisers can be truly
independent if they take commission from products they sell. “There is too
much biased advice,” he says simply.
There is a host of other stuff – too lengthy to detail here. Old colleagues
say Tiner has done a tough job well, reducing bureaucracy but instilling
confidence at the organisation. “It’s much more outcome-focused now,” says
Kari Hale, a Deloitte partner who worked with Tiner at the FSA and Andersen.
The FSA boss has also recognised that the way the City in particular is
regulated is a key selling point for London as it attempts to be the world’s
financial centre. John Duffield, founder of New Star Asset Management, says
Tiner – after some early fumbling – got the balance absolutely right.
“Actually, I think the work he’s done has not been appreciated. You can’t
exaggerate how important it has been.”
Others have not warmed to Tiner, citing his confidence as arrogance. Even
friends say he can be too flippant. One financial chief moans about being
summoned to an early meeting, then being kept waiting because the FSA boss
was stuck in the Black-wall tunnel, and then being told not to worry, it
often happens.
“And why do the regulators have nicer offices than we do?” says the chief,
havinghad a chance to admire the art in the FSA foyer.
Tiner rolls his eyes at such stuff, including the long-stated criticism that
the FSA now pays too well. His salary topped £600,000 last year. “We compete
in a very tough labour market and it’s very important for British financial
services that we have good people here,” he states simply.
It is, as he knows, less than he could command now at a big international
bank. But it is certainly more than pulled in by most air-line pilots, a job
he originally craved when growing up as a schoolboy in Surrey.
“I failed because of poor eyesight,” he says. He has an elder brother who
flies for BA and another who is a doctor. Tiner was encouraged into
accountancy by his father, who spent 42 years at the same machine-tools
business where he ended up managing director.
And since qualifying as an accountant, Tiner says he has just been lucky. The
middle-sized accountancy firm he first joined was taken over by Andersen and
he was allocated to financial services. “I loved it.”
Then, after working his way up at Arthur Andersen, he left, just nine months
before it collapsed in the wake of the Enron scandal. “My timing was
immaculate,” he grins.
He was luckier still two years ago when a doctor ticked the wrong box in his
Bupa medical. “They only do the blood test for prostate cancer on men over
50. I was 47.”
If the doctor hadn’t done the test in error, he wouldn’t have been tested
routinely until this year. “Then it would have been far too late.”
How did he deal with it? “The scarey thing was the doctor sitting on the other
side of the table telling me I had cancer when I felt incredibly fit and had
no symptoms. But I treated it as a little project, actually. The doctor said
there are five things you can do, go away and research it and come back and
say what you want to do.”
He opted for an operation followed by three months’ recuperation. “It was
fine, I always knew I’d come back.
Did it change him? “No, but I was struck by the warmth of people who wrote to
me, and even now ask if everything’s OK.”
Friends feel it may have hastened his decision to quit the FSA. “It made him
think,”
JOHN TINER’S WORKING DAY
THE outgoing chief executive of the Financial Services Authority wakes at his
Surrey home at 5.40am. “I go on the treadmill, lift some weights then eat
breakfast,” says John Tiner. “I get picked up by car at 7am.”
The journey to Canary Wharf takes an hour and three-quarters. Once at the FSA
he will be in meetings. “I have nine executives reporting directly to me,
then there are top-level committees to attend.”
He often lunches guests at the Royal China restaurant, and rarely works after
7pm. He tries to do no more than two evening functions a week. From next
week, he doesn’t have to attend any.
VITAL STATISTICS
Born:February 25, 1957
Marital status:married, three children
School:St Peter’s, Guildford
First job:trainee accountant, Tansley Witt
Salary package:£652,577
Car:Suzuki Jimny Homes:Dorking and Salcombe
Favourite author:Nicci French
Favourite music:Mark Knopfler
Favourite film:The Constant Gardener, starring Ralph Fiennes
Favourite gadget:iPod Nano
Last holiday:Devon
DOWNTIME
“I AM an avid sports fan and support virtually everything,” says John Tiner.
Leeds United in football, Bath in rugby, Surrey at cricket. When not
watching sport, he relaxes by playing tennis – doubles every Sunday – and
sailing. “Just with friends round the Devon and Cornwall coast.”
Most of his money goes on refurbishing his houses. His wife, whom he met when
he was 16, is an “excellent building-project manager”.
Colleagues ribbed him recently that he might bid to buy Leeds United out of
administration. “Not a chance.” Should the FSA regulate football, as David
Mellor once suggested? “Don’t even start,” says Tiner.
says Jonathan Bloomer, another former Andersen colleague and ex-chairman of
the FSA’s practitioner panel. Hale says it speeded up everything Tiner did.
And now what will he do for six months? Bit of sailing – he has a new yacht, a
Malo 46 which he recently sailed back from Sweden. And the whole of summer
beckons at his holiday home in Devon, where his mobile phone doesn’t work.
Hard luck, headhunters.
“The thing is, I don’t know what I’ll do next,” say Tiner. “No one believes
me, but it’s true.”
Friends predict that private equity will come calling. In the meantime, he
hands over to his successor, Hector Sants, managing director of wholesale
and institutional markets at the FSA, on Thursday.
Before then, he’s got Wednesday to worry about, when he’s running a bar from
his desk all day and encouraging all FSA staff to come up and see him.
“I am worried I might be falling over by 3pm, but there you go,” he grins, as
he shows me out. Like I said, not quite the regulator you expect.
Tiner is in cloudcoockoo land when he says that the insurance industry is a stronger industry than before, better capitalised. Tell that to Standard Life policyholders - like myself - where his boys forced the sale of equities at the bottom of the market in 2003. How have policyholders benefited from that decision?
The main problem with the decision is that it is likely to be repeated again and again, because of a basic misunderstanding of "risk". Standard Life appears to have been forced into selling because have fallen significantly from 2000 levels - and this appears in the eyes of the regulator to have made them more risky.
The basic contrarian principle of investing is that the higher the price of the asset goes - be it property, equities or bonds - the less attractive it is. The lower the price, the more attractive. The FSA seems to have no conception of this basic investment idea, and will therefore commit the same mistake time after time, like pension fund consultants.
nimmo, funchal,