The time has come for the industry to make the case for business.
This is not some wishy-washy phrase which might be used by any of
Britain's three centrist political parties but a call for an essential
change in attitude at the top of the FSA and the Treasury.
Currently, there are only two publicly expressed motives behind financial
services policy – to help consumers and to increase competition. These are
laudable aims but the problems come with implementation.
For a stark example of what is going wrong, one only has to look at
remarks made by Financial Services Consumer Panel chairman Colin Brown
about poor advice and how sales supervision by lenders will help. He is
entitled to his view but it is being used by the FSA to justify making no
changes to what almost every lender and intermediary believe will be a
disastrous regime in business terms.
In a similar way, for almost a decade, the OFT has been chomping at the
bit to axe polarisation in the interests of competition, leading to all
manner of claims about market distortion, culminating in the Sandler
review, but it was the OFT that axed the maximum commission agreement.
And in its most extreme case the consumer interest and competition are
supposedly wedded in the stakeholder pension. It is dirt cheap and actively
promotes cut-throat competition but could be disastrous for business.
If only some weighting were given to the need for business to do business,
then some much needed balance could be returned to policymaking.