It is just a few more days until responses to the Sandler review are due to be handed in. Some contend that it is just another review but in my opinion that is to deny it its true potential – a meaningful reality check on the state of retail financial services today. Analysis does not need to mean confrontation.
If I am optimistic it is because I hope that it is a genuinely independent review. My second reason is that the process appears to seek to address simultaneously not just isolated issues but a number of aspects of the industry and how they interrelate. For the first time there appears to be an initiative to understand practical market dynamics. That is as refreshing as it is long overdue.
Undeniably it is disappointing that the industry should be given only two months to respond. But in an ongoing demonstration of optimism, I would prefer to believe that Ron Sandler is merely revealing a keenness to get down to the job after his summer break rather than a failure to recognise the practical difficulties of co-ordinating cross-company, (let alone cross industry), input during the peak holiday season.
If the UK personal finance industry is to flourish,it will do so only with an understanding by all parties involved in the personal finance chain that a free market place is an essential component.
Personal finance is not simply about the manufacture of product. It is about efficient delivery to the client and ongoing effective service. This has to be financially viable if the providers are to be around in the long term to fulfil their obligations.
Similarly, the market must be open and available to new entrants. They too are essential if a truly competitive market is to be allowed to exist.
Rules and regulations exist to provide structure and discipline within the industry and to protect consumers.
However, while this is utterly appropriate as a backdrop, it goes without saying that increasingly consumers, and for that matter all parties involved in the personal finance chain, from client to adviser to financial product provider and on to commentator, regulator, government and its advisers, have to recognise their respective responsibilities.
More rules and more regulation will not necessarily give rise to an improved market – on the contrary, it may throttle innovation and induce an unhealthy degree of reliance by the public on an ever cosseting nanny state.
Furthermore, can we please not forget that if the UK is to compete effectively in a global market it has to be from the basis of a secure domestic environment.
Government tinkering in terms of UK taxation has in the past significantly undermined the global commercial message. Also, local legislative barriers built up over the decades have rendered UK pensions pretty well impenetrable.
No amount of plain English can make the unnecessarily complex, simple for the layman to understand.
So will the Sandler experience enlighten? If government and regulators recognise the importance of an open and competitive market and a sound and professional reputation for the industry, the personal finance industry will have good prospects.
If the industry itself understands the need for quality service and professional advice for investors then those clients will continue to seek guidance.
Even the most sophisticated consumer prefers some kind of professional guidance. It is human nature and therefore behaviour that it is wise not to ignore.
When it comes down to it, the financial environment needs to be fashioned to meet consumer needs and their realistic expectations, not the other way round.
Anne McMeehan is director of communications at Autif