There have recently been a number of attacks in the press on various aspects of regulation which appear to impinge on the freedom of action of financial services practitioners. The more extreme versions suggest taking cases to the European Court and seeking to have aspects of regulation or consumer protection declared null and void. The Financial Ombudsman Service has been mentioned in this connection.
The LIA does not go along with these extreme positions. Our mission statement seeks to promote standing, competence and success for advisers – in that order. What hope is there of achieving standing if we are seen to be constantly attacking the interests of our customers in the press?
We must have concern for those whose savings and protection we are handling. It is very easy in this day and age, with all the talk in the last few decades about allowing market forces to work more effectively, to lose sight of the duties which arise from operating in the public domain. Market forces should apply in any commercial arena but we also need to take into account civic duty. This manifests itself in our profession as pride in a job well done and putting hope of gain in second place to loyalty to the interests of our customers.
To help foster trust, we have the edifice of law, regulation, enforceable contracts, property rights and arrangements to deal with failures or fraud. This framework makes it possible to learn to trust each other and for those who are acquiring services or goods to be confident that they will get a fair deal.
It is interesting to note that many business leaders say the biggest risk they face is loss of reputation. This comes before regulation or economic downturns. Yet often the subliminal message the public are getting is that profit comes first.
I do think that public comment by the financial services sector needs to take more account of the position of its customers. Many consumers are baffled by the messages they receive and distrustful of the integrity of the people they are dealing with. We can only overcome that by consistently behaving in the right way and showing that we genuinely care what happens to the people who use our services.
There are some structural issues in relation to the Financial Ombudsman Service and the FSA which will be dealt with over time but I think the semi-automatic knocking of these organisations is all far too easy and evidence of an immature stance in relation to our public responsibilities.
John Ellis is head of public affairs at the LIA