Financial Conduct Authority chief executive designate Martin Wheatley says the rest of the financial services industry should learn from the way advisers build long-term relationships with their clients rather than treating them as “profit centres”.
Addressing the Aifa annual dinner in London last night, Wheatley (pictured) discussed how the market has changed since the RDR was conceived six years ago, and how trust in financial services has been damaged by recent misselling scandals and the manipulation of Libor.
He said: “We have seen the misselling scandals that we are unfortunately still having to deal with, predominantly in the banking sector. We have seen a change in culture in much of the financial markets, where the consumer or the client has ceased to become valued for the long term, and has become a profit commodity for the short-term. I am delighted that is not prevalent in your industry but it is something that shakes confidence overall in financial services.”
Wheatley said the the biggest change that needs to happen is the level of trust in the financial services industry as a whole.
He said: “The great strength of your sector is that by and large you have not lost that trust. The great strength of your sector is you are close to your clients, you understand your clients and have a long-term relationship with them and you know you cannot treat them simply as profit centres.
“Unfortunately that has not been the case for every part of the industry, and I hope that much of the rest of the industry can learn the importance of putting the consumer at the heart of their business in the way your industry has traditionally done.”
Plan Money director Peter Chadborn says: “It is very encouraging for the adviser community that the regulator has recognised IFAs provide a valued service, whereas banks have actively discouraged providing ongoing service by basing remuneration around one-off business.”