Your columnist feels foolhardy enough using this space to regularly point out the shortcomings of the FSA but when it comes to challenging Google in the same way, any internet marketer best tread very carefully. Lord knows what Google can do to a search engine optimisation or pay per click marketing campaign if they decide you need to be punished for pointing out flaws in their methodology.
Let’s hope that they are benevolent gods for there is no doubt that seeking to regulate a financial services market without regulating its online outcomes is becoming a less viable approach with every passing day. Already, the vast majority of consumers who set out to learn about any particular aspect of financial services will type the words they think most relevant into their Google search bar and for most that means they will get to meet whatever site Google thinks most suits those words. If that turns out to be sellers who provide a very different solution from anything that might constitute good advice, then the FSA’s very expensive efforts at educating consumers are being dwarfed by the world’s most powerful marketing tool.
If you type in “life insurance” not one prominent player on the first search page offers advice as their primary solution. But the FSA are clear that non-advice, while acceptable, is not the process likely to yield the best results for those consumers not sure of what they want. Try “critical
illness”, which arguably only the truly expert should buy without the protection of the ombudsman, and again nonadvice dominates entirely.
There is no requirement to ensure suitable buying decisions. Worse still, type in “income protection” and you have the fantastic irony of the disgraced PPI market being laid out in front of you, having hijacked the good name of an entirely different product. And I am told that “Isa” and “pensions” and all other likely words will lead most to nonadvised, non-ombudsman protected solutions.
So the web and non-advice are synonymous and that may not matter much when you are buying a book but, in financial services, the quality of the buying decision is rightly seen as being of such importance that protecting it has spawned the vast quango that is the FSA and the huge costs it imposes on all in financial services.
In the end, only the consumer can pay that bill but if consumers mostly all do their learning without that cost base and its protection, what is the point of having it? It is regulating and protecting a rapidly shrinking proportion of all buying decisions each day.
Google decides who consumers are most likely to meet according to the amount they spend and the structure of their site, not in any way through the quality of the consumer outcome. In short, the free market is colliding head-on with regulation and the free market is winning by a mile. No problem there but where does that leave a bypassed regulator?
The logic it seems to me is that either the regulator insists that Google gives priority to advice and the routes proven to best serve the consumer
or the regulator folds its cards and leaves the game because the game is online and online solutions are not regulated as to their suitability or quality of outcome.
Tom Baigrie is managing director of Lifesearch