This July 1st 2017, marks six years since the Bribery Act became law. Its aim? Simply put, to guide businesses in preventing bribery. Hot on the Act’s heels followed the Financial Conduct Authority guidelines in 2014, setting guidance for product providers and advisory firms on inducements within Financial Services. For those engaged in hospitality, Page 12, Section 2.35-2.39, would have a marked effect on conduct going forward.
The guidelines are vague at best, misleading at worst, and too open for interpretation. Therein lies the problem. With few hard facts provided by the FCA, businesses are confused as to what is and isn’t acceptable when offering guests hospitality. This lack of understanding has led to common myths prevailing. In our business, we often hear “We can’t entertain anymore,” or “There is a £200 cap on spend per person.”
Infrared recently held a breakfast seminar on this very subject. It was shocking to see how much disagreement there is amongst financial professionals, who operate within the hospitality industry, as to what is and isn’t allowed. The grey area leads to businesses adopting their own, often stricter, polices to ensure employees toe the line.
This situation is compounded further by the FCA’s apparent unwillingness to accommodate dialogue as to what is acceptable. I’m not having a pop at the FCA, quite the contrary; it’s clear there must be guidelines in place, but, and it’s a big BUT, what’s the point of guidelines if the majority clearly don’t understand them?
The result of all this is an understandable decline in Financial Services companies partaking in sports, entertainment and cultural events, pulling out of sponsorships or rejecting new opportunities to sponsor. Although not the only deterrent, many fear the heavy fines that the FCA can mete out if guidelines are transgressed. This situation was highlighted in a recent Times article, “Hedge funds trim Chelsea hospitality,” which points out that in three years, the number of sponsored gardens at the Chelsea Flower Show has dropped to eight. In 2008, it was 21! Not saying it’s all to do with the FCA guidelines, but it does make you wonder.
Now you’re probably thinking I would say all this because it’s in my best interests that financial businesses invest in hospitality. After all that’s the business Infrared are in. That is certainly true, but what I want, along with the thousands of financial-service-related businesses involved in hospitality, is clear advice, not ambiguous guidelines. The lack of clarity is damaging and has consequences that far out reach just the hospitality industry. Fewer sponsors reduces the trickledown of revenues to grassroots level, lowering investment and reducing opportunities where they are needed most.
So I implore the FCA to help us all out. Stop hiding behind the guidelines, work with us, our competitors, and the financial industry to provide clear advice that means we can all avoid mishaps.