My trips to the bank are, thankfully, few and far between. Earlier this week I made one of those rare visits to pay in a cheque. With only a couple of people in front of me in the queue, I decided to wait for a cashier rather than fill out the paying-in slip and drop in an envelope instead.
Eavesdropping on the conversations of other banking customers is often enlightening. In the past I have witnessed questionable Isa advice and attempts to put customers in front of the ‘financial planning manager’ to move new cash deposits into investment products.
This week it was an elderly lady worried that the local branch had been sold off and would be closing down (“no, and neither are the other seven branches you asked about”), and then another elderly lady asking the bank to stop sending her so many emails (“they weren’t from us, they probably came from Nigeria, just delete them”).
It seems that, despite rigging rates and facilitating money laundering for drug barons, our High Street banks are beyond reproach. They never seem to get things right, but they never receive the killer blow to their reputations that see customers leaving in droves either.
Even their contribution to the global financial crisis, pushing the UK economy into recession and creating financial hardship for millions, does not appear to have been enough to convince the average customer to seek an alternative.
Maybe there are no truly viable alternatives. We have seen an innovative banking service crop up in the form of Metro Bank, which has grand plans for the future but limited coverage at the moment. Online banking will also only appeal to so many customers; the old lady asking at my bank about branch closures probably isn’t going to bank online, and the one who thought the phishing emails were coming from the bank itself probably shouldn’t ever bank online.
When the Co-op acquisition of over 600 Lloyds branches takes place, there could be a little more competition in the market. Or perhaps nothing much will actually change; the same staff will be dealing with the same customers, who will have the same mortgage deals.
Assuming that nothing will really change in the seedy world of banking – customers will remain loyal to their local branch and bank bosses will keep squeezing massive profits out of them – is it time for us IFAs to promote our roles as the saviours of banking customers more actively?
I have, until now, resisted the temptation to escalate my in-branch behaviour from unavoidable eavesdropping to an actual intervention to protect a vulnerable customer. As tempting as it often is to jump in to prevent another structured product from being mis-sold, I suspect few would thank me for this minor act of heroism.
As the part of the retail financial services sector responsible for the bulk of reputation damage and negative headlines, we need to sever the link between banks and financial advice. There is a clear distinction between the sales activities of the banks and the advisory or planning services delivered by IFAs.
Helping bank customers realise this distinction when they remain stubbornly loyal to their local branch is the real challenge we all face.
Martin Bamford is managing director of Informed Choice