Eddie Hobbs, the Consumer Association of Ireland spokesman on financial services, is rarely out of the public eye. The launch of his latest brainchild, the association's savermark for the new special saving and investment accounts, has given his already high profile another boost.
It has also stirred up the issue of the conflict of interest that arises from Mr Hobbs's dual role as one of the State's most successful investment brokers and his position as CAI spokesman on financial services.
The relationship between Mr Hobbs and the CAI dates back to 1993 when he was working for Mr Tony Taylor, the former investment adviser who will be tried for fraud later this year. Mr Hobbs started a very successful campaign to expose the numerous shortcomings of endowment mortgages, which brought him to the attention of the CAI. He was asked to join its governing council and has been re-elected every second year since.
The CAI's articles of association preclude from council membership "director executives" of companies involved in the marketing of consumer goods or services. The reasons are self-evident.
Such individuals can join the council only under certain limited circumstances, such as the absence of anyone else to do the job. Mr Hobbs's appointment obviously falls into this category. Over the last eight years he has been a very active member of a sometimes moribund organisation, spearheading several campaigns and proving an able media performer. This newspaper and others regularly use him as a commentator in both his CAI and industry professional guises. His investment advisory business, Financial Development & Marketing (FDM), carries out an annual survey of pension funds which is published by The Irish Times.
Since parting company with Mr Taylor in 1996, Mr Hobbs has built FDM into an extremely successful business. There can be no doubt that his public profile as the consumers' champion has helped Mr Hobbs in developing FDM and in his other business interests. These include a company called The Financial Architects, which is developing a training course for financial advisers. It produces BOSS, a leading software package for financial advisers.
The benefits to Mr Hobbs of being the CAI spokesman are hard to quantify. It can be argued that as the person who has dictated the pace and nature of many consumer-driven reforms in his industry, he is better placed than most to remain ahead of the game.
He is also the only broker in the State who can rest assured that he will never have the CAI financial services spokesman give him a going over. His relationship with the CAI has, without doubt, helped Mr Hobbs to become the most powerful independent financial adviser in the State. His publicly expressed views on his competitors, financial services companies and their products can be devastating.
More significantly, he has also built a lucrative business providing consultancy services to the industry for which he is the consumers' watchdog and this is where the real conflicts of interest lie.
MR Hobbs is a consultant to a number of financial services companies, most notably the Quinn Group and Friends First. He also works for several companies looking at entering the Irish market and advises a number of other intermediaries, including the Automobile Association.
He advised Quinn Group on its initial strategy for entering the life and pension market three years ago. He has an ongoing relationship with it as an adviser on marketing issues while at the same time he polices it on behalf of the CAI.
Mr Hobbs makes it clear he was not involved in the design of the company's SSIA products which include one of only two equity-based SSIAs to achieve the CAI savermark.
Mr Hobbs also worked with the other savermark winner, the EBS building society, but in his role as CAI spokesman.
To Mr Hobbs's credit he is open about his conflicts, even if he does not go out of his way to publicise them. In his view the issue comes down to his personal integrity. He points out he is authorised by the Central Bank to give investment advice and the Revenue Commissioners consider him a fit person to be a trustee of a pension fund.
Some questions have been raised concerning his relationship with Mr Taylor. Mr Hobbs was registered as a director and 24 per cent shareholder in Taylor Asset Managers when Mr Taylor left this State, leaving clients out of pocket. Mr Hobbs claims he resigned several months earlier and has addressed the issue several times in the past. Mr Hobbs also played a role in both revealing details of activities of the Taylor group of companies and then in the process which saw Mr Taylor's return to Ireland. Not the actions of a man who has anything to hide.
There is no reason to believe that Mr Hobbs carries out his dual role with anything other than integrity, but his position is still not tenable. Even he privately admits that the time may be close when he has to part company with the CAI. The savermark issue may prove to be the breaking point.
So significant are the conflicts he faces that they are sufficient to undermine the value of the savermark and the service he is trying to do consumers. If the boot was on the other foot, one doubts Mr Hobbs would let an opponent with such a strong conflict off as lightly as he has been to date.
