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Parallel lines


The banks managed to scare most of us when we found that far too many of them did not understand what they were doing, nor did they seem to care for their clients.

Now we find they have been misunderstood or perhaps they have simply seen their true path after all? One such born-again institution – Barclays, has been telling us just how wrong we were to think otherwise.

At a recent Which? banking commission hearing, Barclays global retail banking chief executive Antony Jenkins said : “Misselling is a very serious problem but there is absolutely no benefit at all for us to sell a product that the customer neither wants nor needs. We want a longterm relationship with our customers.”

He said when he visits branches, he finds colleagues are “very keen to get the customer the right product” and “might even raise things to their attention like, do you have enough life insurance?”

“I do not claim perfection but we have a good culture and we put the customer at the centre at everything we do.”

Capital Economics managing director Roger Bootle suggested Jenkins was living in a parallel universe.

It is simpler than that, Jenk ins is ignorant of the differ ence between selling and advising.

He talks of when they “sell a product”, then he talks about long-term relationships. Sorry, but sales and long-term relationships just do not connect. I suspect he would not know what the sales process was in detail, yet he talks of its quality.

How is this quality determined, have the banks not had record complaints or am I in a parallel universe?

Relationships take time to establish, they are not determined by a single action. Banks seem to operate a bit like a one-night stand where a quick connection is all that is needed.

The banks have the greatest oppor tunity with their distribution network. Is the bonus system for their senior staff the issue as it rewards short-term actions with no clawback for failures that emerge later? The bonuses should be based on at least three key performance indicators – customer satisfaction, complaint ratios and, last, profit. If bonuses are out of alignment with the actions you seek to encourage, then you are bound to fail.

One evening I sat down the watch TV and switched off when the NatWest ad appeared with all those smiley meetings where product names are thrown around like confetti. I then picked up that day’s paper where the same bank referred to their advisers as Financial Planning Managers with “expertise”. How many are at chartered or at least certified financial planner level? If the answer is not many, this is an issue for
the ASA and the FSA.

I have spent many hours honing my financial planning skills, I invested a lot of time in helping secure the chartered financial planning title but
I need not have bothered. I could have joined a bank and called myself a financial planning manager when the only planning I was doing was
to shift more product.

I am sure they will protest I am wrong, I will only back down when they provide evidence of the fees they earn from holistic advice.

There are bankers who recognise the need to move away from product flogging but too many fail to support long-term relationships as they are seen to be major roadblocks to profits.

The FSA has the opportunity to make things right with the RDR. I hope their views have not been skewed by the lobby of the product floggers.

Rob Reid is managing director of Syndaxi Chartered Financial Planners


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