If the opinion polls are to be believed, on May 6 the country will vote the Conservative party back into power, and David Cameron will be our leader. Of course, there is a lot of time and endless debates to go yet but whoever gets into power in early May is very likely to be pledging to make very significant changes to the financial services industry. Changes that will make mortgage conduct of business rules, the retail distribution review and the mortgage market review merely look like minor interruptions to service.
The Conservatives’ pledge is to abolish the FSA and increase the Bank of England’s powers. Labour is likely to protect and maintain the FSA, but reform the banking system, splitting up the larger banks and creating space for a number of new entrants. We might even get more mortgage supply. And the Liberal Democrats, who may not win but could have an important voice in a hung Parliament, will give more power to mutuals, and impose stricter regulations on the industry. If the parties stick to their policies, we can expect to see very much more upheaval across the sector. And change creates consumer confusion.
Before anyone presses the panic button, let me explain why I see this as a unique opportunity in the intermediation sector, as it is the sector which is fleet of foot and should always be consumer-sided. There are going to be changes for everyone in all walks of life. With the economic gloom still hanging over us, we all know there is a hard twelve or twenty four months ahead, and the ruling party will be making tough decisions to pull this country out of the economic mess we are in. Even at the best of times, the general public is apathetic towards planning for their financial future.
In a time of change and uncertainty, they could well retreat into their box even more, shrewdly guarding their money today rather than investing for tomorrow. They need reassurance from real people, which is where I believe our professional expertise and experience will need to come to the fore.
Rather than telegraphing concern or panic about market conditions and the challenges surrounding us, such as a lack of mortgage supply, let us continue to be the calm and reassuring voice for our clients, giving them balanced guidance about what is happening in the financial world.
Whatever the political result in the coming weeks, we must clearly be on top of any policy or product change and strongly communicate with clients. It is this skill, the ability to read the market and impartially inform our customers, that has stood the intermediary market in good stead for so long.
There is no doubt in my mind that significant numbers of consumers will be worried about what will happen to their money, how taxes will change and what financial future they can expect. They will need your reassuring voice even more to guide them through the coming months.
Product manufacturers are still not trusted and are just not regarded as sufficiently on the customers’ side. Yet intermediaries have a golden opportunity to win credibility and loyalty by playing that key role.
Rob Clifford is a founder and director of If I Were You