Titanic fever seems to have gripped the nation, or at least the media, and we have endured a barrage of connected and non-connected nonsense including themed crosswords and a plethora of TV programmes.
Karl Marx said: “History tends to repeat itself…the first time as tragedy, the second time as farce.” This gave me pause to consider whether in these frenzied times there might be a financial services metaphor suitable for this historic event. Why, there is, and you have probably got there before me.
Picture the scene – the camera focuses on Hector Sants, captain of the good ship FSA, sitting feet up while enjoying a glass of Rioja. Chief mate Martin Wheatley is similarly engaged while sending memos advising how best to stop irrational seagulls from making bad eating decisions.
The ship chugs ahead with the rudder fixed and the helmsman under strict instructions to leave the wheel alone. Crew members are becoming agitated as the ship moves through icy waters. Surrounding the ship are thousands of small IFA boats, many single or double-manned with their oarsmen waving frantically and shouting dire warnings.
The crew of RMS FSA leans over the rails to see what the noise is. “There is an RDR iceberg ahead,” shout the frenzied small boat owners. “What is that? We cannot hear you,” responds the crew. “It is a massive iceberg,” they scream, even louder. “You are heading straight for it, can’t you see it?” The crew chuckle at this and explain the ship is designed to cut through such nonsense as icebergs and, in any event, the captain has given strict orders not to be disturbed while he formulates future plans.
Just then, to the astonish-ment of the crew, captain Sants leaps into his readied lifeboat and sets off for sunnier climes.
Will this voyage end in tragedy? Yes, for some but not all. Those who regulate are unaccountable, except to their own consciences, and even then the alibi of collective responsibility can be used to deflect subsequent criticism. When we look back, it will seem so obvious, a bit like the dotcom frenzy, but will history reflect this failure of collective responsibility or will the miscreants be able to repeat Winston Churchill’s triumphant retort, “History will be kind to me, for I intend to write it.”
Incidentally, the inflation-adjusted cost of the Titanic is £694.9m, something of a bargain compared with the RDR.
An interesting phenomenon is the rise of the Nationwide Building Society in many people’s esteem. Now let me say I have always had a reasonable relationship with Nationwide but I also believe a return to rationality is in order.
Nationwide is lauded for its mutuality and commitment to members but this does not extend to its selling of protection products. I wonder how members will feel if or when they find out that they are being charged 30 per cent more for their Legal & General protection plans than clients of IFA firms and even of Barclays, which is similarly tied?
A visit to the Nationwide intermediary website also provides a bad taste. Among the many useful downloads and tools is the affordability calculator. This is designed, one supposes, to enable advisers to assess an applicant’s borrowing limit. Much information is requested, including date of birth, loan amount, etc and a loan figure is brough up, leaving the adviser and client with a degree of certainty about borrowing capability, right? Sadly, this is not the case. The affordability calculator spits out figures based on the assumption of a 25-year repayment term. So, when an application for a 15-year mortgage term is input, it can result in a decline and a waste of everybody’s time. Surely in today’s techno world, Nationwide can do better than this?
Alan Lakey is partner at Highclere Financial Services