One of the first things people assume about financial journalists is that we love to go out on a ‘freebie’ every night of the week. There are some of us like that, to be sure – and I like a good drink as much as the next person.
But speaking purely personally, after 10 or more hours in meetings and slaving away in front of a computer, not to mention listening to inane pitches from pushy PRs and skimming through stroppy emails from IFAs, what I often prefer after a day’s graft is a nice quiet night in with a book and a glass or two of vintage Barolo.
Even so, it can sometimes be useful to accept an invitation for a nice bit of nosh – especially if the person doing the asking is someone you really want to meet.
So when the marketing director at Fleming Investment Management asked me out for a bite at the Quality Chop House in Farringdon Street more than 20 years ago, I leapt at the chance.
Which is how I met Daniel Godfrey for the first time, back in the early 1990s. I have bumped into him a few times since, especially when he was still at the Association of Investment Companies as its director general.
To be honest, I have been highly impressed by the man – something I have tried not to talk about, as I have always known it could mean the kiss of death for his long-term career in financial services.
What I liked about him was that while he was passionate about defending the role his members played in the savings and investment industry, he was also prepared to be critical about unacceptable practices, especially opaque and often excessive charging structures applied by some of his members. He seemed determined to root them out.
In the event, it was not my admiration that did for Godfrey, who was last week turfed out of the chief executive’s chair at the Investment Association, but his fellow members who could no longer stomach a trade association leader allegedly behaving like a regulator. What they really did not like, apparently, was someone at the helm of the IA who engaged in an “aggressive push for reforms, including more transparency for customers and curbs on executive pay”, in the words of the Daily Mail’s Ruth Sunderland.
What really stuck in the craw of his critics, who threatened to leave the IA as a result, was Godfrey’s attempt to get its members to agree a statement whereby they would promise to put clients’ interests first. Shocking stuff.
For the M&Gs and Schroders of this world, not to mention other fund groups that threatened to resign from the IA alongside them, the very suggestion that he should be campaigning for greater transparency within the industry was anathema.
So, to put it bluntly, they engineered a coup against him. What always happens after a coup is that those who carried it out seek to justify their actions by claiming the person they dumped did not have the true interests of the organisation at heart.
In Godfrey’s case, up popped Helen Morrissey, chair of the fund association and chief executive at Newton Investment Management, who was quoted in the FT saying it was not the reforms he was trying to promote that her members objected to but “how they were being carried through”. Presumably this is why only one-eighth of IA members signed up to Godfrey’s reforms.
For her to then say “we clearly need to be better at getting our message across to the public”, when her organisation has defenestrated one of its few leaders who managed to do so while still giving the impression he was actually listening to the public is rich.
For me, one of the worst aspects of the entire story is what it implies about trade associations operating in this industry.
Over the years, it has become clear there is a growing gulf between increasingly sceptical consumers and fund management groups, insurers and banks, which all seem to put their business interests ahead of those they are there to serve.
It is this growing mistrust that fuels what some people call the ‘savings gap’, the increasing amounts we are being told to save to pay for our retirement or to meet other financial needs.
If there is a lack of trust, one of the ways it can be reduced is by trade bodies that represent members working in the industry being able to demonstrate how they are standing up for the interests of consumers.
The Russians have a word for it, ‘smychka’, a coupling which has been unromantically described as “like joining two opposite branches of a railroad whose construction was started from both ends”.
Unfortunately, rather than reduce the gulf between the industry and consumers the IA has chosen to raise its drawbridge and sack the man who could have earned back some of that trust.
Sadly, the brutal truth is most members of the public will not know about Daniel Godfrey’s sacking and would not care even if they did. They will just carry on saving less and refusing to trust the industry much as they did before.
More of the same for the IA, then. As for Daniel Godfrey, if he’s ever feeling peckish, the next meal out is on me.
Nic Cicutti can be contacted at email@example.com