Northern Rock boss Ron Sandler’s brassneck speech at the CII President’s dinner on Tuesday night, in which he laboured in his defence of banking institutions whilst hitting out at his audience of advisers and insurance companies, left a sour taste in the mouths of many guests.
Following on from the well received speech from Friends Provident chief executive Trevor Matthews, Government golden-boy Sandler set about a staunch defence of the indefensible.
Like a well-rehearsed lawyer defending a client who is guilty as sin, Sandler spent much of his speech calling on his audience to recognise the good work of the banks and not to vilify the greedy individuals who have got the country into such a state.
Part of Sandler’s reasoning for defending the banks was that he had to given he is a past president of the Chartered Institute of Bankers. Perhaps the opposite should have been true and this heritage should have made him even angrier at the way certain banks have behaved in recent times.
He then followed up with a few cheap shots against his adviser audience. Sandler crowed about how he uncovered how terrible the industry was when he conducted his long term savings review in 2002, which led to the ill-fated suite of stakeholder products.
Although Sandler came up with some correct assumptions at the time in terms of the need for greater consumer empowerment and the problems created in a world where advice is not valued, his obsession with price was a chief reason for the failure of the products to take off.
Sandler’s speech appeared to represent the views of a group of banking institutions who, despite everything that has happened over the past year, are still in denial.
He used the issue of commission as a stick to attack advisers but any problems in this area have been seen far more prevalently in the banking community than anywhere else in recent times.
The adviser arms of banks, masquerading as top-end advisers, have been at the centre of the scandals surrounding the AIG enhanced fund and Lehman-backed structured products, with hefty commissions paid to their advisers to shift large amounts of clients into such products.
Perhaps Sandler’s speech should have focused on the need to clean up dodgy advice being given out by his banking friends rather than hitting out at advisers, especially considering the great strides towards increased professionalism many IFAs listening to the speech have already taken.
Were you there? Let me know what you think.