Nic Cicutti’s piece on self-interest at the end of last year hit a note with me. You see, I normally range from never agreeing with him to sometimes agreeing slightly with some of the issues he raises if I squint a little. But with this piece, I found myself, despite not actually wanting to, agreeing with him completely.
It has only taken 20 years of “trying” to achieve this momentous state.
Anyway, the point is, I find myself reading our industry press and other media and either seething with indignation or smugly agreeing, then tutting quietly before taking another swig of coffee and getting on with more important things. I honestly try to read these things and put aside my own self-interest but, of course, it is almost impossible to do.
Having just reread Nic’s article again some weeks later, I still agree with his point that, essentially, the financial services industry is full of self-interested parties lobbying furiously to guard their future livelihoods.
Those who have moved to a particular business model understandably shout about their methods being best while equal and opposite businesses argue that theirs is the only modus operandi that will work.
Of course, as with most things in life, the real answer is somewhere in the middle. I suspect there is room for us all, in whatever shape or size we appear. But under the motivation of self-interest, people can argue that black is white and start to truly believe it.
Here is a simple story to illustrate my point.
A friend of mine, a GP, visited us one Christmas a few years ago. She had an awful cough and firmly of the opinion that the cough medicine I offered was no use whatsoever and preferred to carry on coughing all night long.
Curious about her rejection of such a common medicine which the rest of us use without question, I asked her why she would not take it. Her reply was typically measured and professional.
She said she had just got her new copy of Clinical Evidence, a book which looks at all the reputable trials regarding treatments and grades them as beneficial, unknown effectiveness and unlikely to be beneficial.
She was proud to tell me that cough medicines (antitussives) fall in the unknown effectiveness category. This is because in trials they are no better than placebos except for one which was better but caused stomach upsets. Look it up yourself on www.clinicalevidence.com and type “cough” in the search section.
Most doctors she knows think along the same lines although I gather they do occasionally use them for their placebo and get-people-out-the-door effects. She feels the public tends to think that they work as there are so many of them and they are heavily advertised.
If you think about it, this is pretty scary stuff. Is my GP friend saying that the pharmaceutical industry is pulling the wool over our eyes to the tune of, I suspect, many hundreds of millions of pounds every year?
Are we being missold a product that is shown to be clinically ineffective and utterly useless? Perhaps the drugs industry is flogging a “pup” in the full knowledge that we are mug enough to place our faith in something we think works simply because they say it does.
In other words, the drugs companies may have created a demand because it pays them to do so. It is in their own interest, not ours.
Apply this lemming-like behaviour to the financial services world and what do we have? A population that believes black is white and a regulator that is moving more and more towards a non- (excuse the pun) prescribed approach that allows this ambiguity.
I cannot help feeling that we all need a little less principle-led legislation and a few more rules to follow. Then we will all know where we stand. Or perhaps it is in the regulator’s best interest to keep creating demand for the sake of its own existence?
Tom Kean is compliance officer director at The Analysts.