The industry has one last chance to bring consumers back into the fold after failing to serve their needs, warns a report by business thinktank Tomorrow's Company.
The report, Restoring trust – investment in the 21st Century, is the result of two years' consultation among more than 500 practitioners and investment groups representing all parts of the investment chain.
The inquiry team, led by former Glaxosmithkline chairman and now rector of Imperial College Sir Richard Sykes, sought to take an holistic view of the whole investment system.
It highlights three key themes – the need for culture change, the need for a change in the way companies and investors deal with each other and the need for strong leadership.
It says the industry has failed in each of these areas and needs to take urgent action if it is going to re-engage increasingly jaded consumers.
The inquiry calls for an act of collective leadership by the industry to work together and become more customer-focused.
It says the industry should create a forum for self-regulation and calls for greater transparency over fees.
Sykes says it is the last chance for the industry to get its act together and says it needs a change of culture that genuinely puts the customer first and takes a long-term view. Common interests need to be put ahead of competitive instincts in the City.
He says: “We have made progress but not enough and tougher, less helpful regulation from overseas lurks round the corner. In short, the stark choice is between leadership and suffocation.”
Chadney Bulgin IFA David Thomas says: “People do not seem to get the back-up following a sale. I would completely support something like this and it is similar to what the FSA is looking at in terms of treating customers fairly.”