If there is one thing that marks out all human beings, it is that we want to feel what we do every day helps others. The idea that we are simply governed by a need to make money at the expense of someone else is not something any of us will readily admit to.
Which helps explain why, when we describe what it is we do most of us like to imply – at the very least – that we are delivering a positive service to the community at large.
This is as true for journalists like me, who pretend that what we write every day has the power to right wrongs and make the world a better place, as it is for IFAs whose lachrymose tales of how they help widows and orphans in their desperate hours of need has never failed to bring a lump to my throat.
What I had perhaps did not realise is how much every other section of the industry feels the same way, desperately needing to cover its activities in the cloak of righteousness.
Take Stephen Gay, former director general of Aifa but now the ABI’s new director of life and savings. In an intriguing interview I saw on one website the other day, he argued that both trade bodies – his new one and the one he formerly led – were “on the same side: the consumer’s”, and that their interests were aligned.
As an example of the ABI’s willingness to “adapt and change”, Gay cited the decision by its members to agree a voluntary code of conduct whereby people could shop around for annuities.
Now, forgive me for saying it, but I am not exactly overwhelmed by this example. After all, if this were the “proof” of the ABI’s alignment with consumers, then it leaves one wondering how it could be that for the best part of the past decade the industry has strenuously opposed attempts to introduce just such a code of conduct or at least derailed them with all sorts of objections.
Not only but one might ask how it is that such a voluntary code was actually agreed almost a year ago yet the precise detail of how it will work has still not been decided.
Intriguingly, in the interview, Gay himself gives a strong hint as to why the industry agreed to a code after all its obfuscation on the issue over the years. “The question was whether we should create a code of practice or have legislation passed. That is a question of the relationship between government and the industry.”
In other words, the ABI agreed a voluntary code because it was either that or have one rammed down its throat. Yet it continues to delay its setting up – even though it knows, because its own research over the years has said so repeatedly, that the reason a minority retirees make use of Omo is a combination of consumer inertia, apathy, lack of awareness, complex application forms and lengthy timescales involved in the process.
Even more laughable is Gay’s approach to hidden charges operated over many years by its members which, let’s not forget this, were structured in order to give a misleading impression of low RIYs for the majority of consumers.
Which begs the question of whether the ABI’s members who came up with these clever charging structures did so because they were “aligning their interests” with those of consumers. Or that when it opposed charges disclosure, as the industry did for so many years, this too was all for the benefit of consumers.
Be that as it may, Gay told his interviewer: “The ABI is not here to argue for the status quo on charge disclosure. We are not standing against the Zeitgeist.”
Except, of course, that the ABI is standing precisely against the spirit of the age: there is no evidence whatsoever that the industry is planning anything like the action needed to ensure this long-running scandal is resolved any time soon.
Indeed, when it comes to explaining why customers’ trust in providers had been eroded, notwithstanding this alignment he chirps on about, Gay blamed a “generally less trusting” society and a “backdrop of increasing consumerism.” In other words, it is all the fault of consumers.
Actually, I really wish people such as Gay stopped talking about “alignment with consumers”. Why don’t we all just accept that we are on completely different sides on this and all other issues. The bottom line is simple – life companies are there to make money as much of it as possible, out of the people they sell products to.
That unadorned reality means you sometimes have to sell things that are not appropriate or have heavy charges allowing you to boost your profits more quickly – and it is harder for those who buy your products to work out how much they are paying for them.
If Gay was to admit that, we would no longer have to maintain the fiction of both of us being on the same side. He could then just get on with his members openly trying to rob customers – and we would then be under no illusion as to who our enemies are.
But that would mean the ABI being unable to feel self-righteous about its day-to-day-activities. We cannot possibly have that, can we?
Nic Cicutti can be contacted at firstname.lastname@example.org