In conversation with a representative of the FSA, we touched on the
subject of greater professionalism. One of the bees in my toupee. Do you
really want to attain the now rather tainted image of the “professions”?
Bearing in mind the medical and legal scandals plus the militant approach
of some of the teaching unions, I would have thought some other standard
would be preferable. Such was the general drift of his comments.
This set me to thinking. It is true “the professions” are not held in the
same esteem as they were 40 years ago. The idea that a doctor, lawyer or
teacher could be anything other than a person of integ-rity and a pillar of
society is pretty outmoded.
So why is this hangover from a previous age still a sought after image? I
think it is because, in spite of adverse publicity, the general expectation
is still positive.
In the various locations in which we all operate, I am sure you can
think of individuals in all walks of life who are not “professional”
in their approach.
What we all need to do is to improve the general expectation of the
quality of service provided by the financial services industry.
While regulation has a role in this, there is no doubt the primary
motivation should come from public pressure.
During a visit to one of the very best residential care homes I have seen,
I talked to the owner about current regulation and how it might change in
He looked me straight in the eye and asked me if our regulators could
possibly find out what we were like from their standard inspections. He
took the view that any business which failed such a visit was doubly
There is no substitute for hard probing from relatives (or clients). Tough
questioning and surprise calls at awkward times. “Abseil down the walls at
three in the morning” were his actual words.
Careful scrutiny of emp- loyee relations and pertinent questions relating
to their contracts of service may be more practical.
The British are generally very poor at this and it is one of the reasons
competition is not as effective as in the US, where expectations are much
higher. If high standards are possible from one supplier, why are they not
possible from all?
It struck me that this was also true of financial serv- ices. You may
believe you provide a top-quality service but it is not your judgement
that is important.
Clients are the real jud- ges, not the regulators. However, this judgement
is made almost impossible if what we provide is not presented clearly and
Very few clients leave us. When they do, we count this a dreadful failure
on our part. In most cases, it is a failure to be understood rather than a
failure to produce results.
Regulation would be less necessary (and less costly) if consumers were
more prone to accept the prime responsibility for obtaining the best
products or services lies with then and not some outside agency. The
tendency to look for scapegoats when we suffer loss is still very
prevalent. “Who pays? Not me” is still the cry.
Recently, we have been told that the Institute of Actuaries has requested
Sir John Banham to carry out an investigation into sales practices in
Apparently, the institute is concerned that the products it designs may
be missold and its reputation could be tarnished. I was amazed.
Given that it is these very actuaries who gave us such devices as capital
units, which were specifically designed to confuse not just the public but
also the sales channels the insurers use, their reputation is already lost.
It is difficult to misrepresent the transparent and actuaries have also
been less than transparent in the past. The present is not exactly
untainted by opacity. The com- panies take no responsibility for the
quality of the people who independently distribute their products.
There was a saying a few years ago that the insurers were the whores of
financial services. They would get into bed with anyone. Has this changed?
The Institute of Actuaries may be trying to get its retaliation in first
but Sir John is on a failed mission.
Bob Young is director of Wilcox Young Personal Wealth Management