In the midst of a devastating economic crisis, Sandler spent much of the speech defending the banking institutions which were the root cause of it. But it was the way he jumped from this to an attack on the business model of advisers that hit such a sour note.
The troubling thing about Sandler’s view is, despite all the well publicised failings of his banking friends in recent times, it still represents the opinion of many in the banking sector. More worryingly, it also probably represents the views of many in the Treasury.
Hopefully, one of the good things to come out of the economic crisis is a greater realisation at all levels of the huge gulf between the bad advice often given by bank advisers and quality, customer-focused inde- pendent financial advice.
Following on from this must be a crackdown on the sales practices of bank advisers who have been promoting and marketing themselves as providing a service on a par with IFAs.
Money advice failings have been exposed in the last year. Time and again, it is IFAs who have had to pick up the pieces after clients have suffered bad advice from big banks.
The language emanating from the FSA, in both Lord Turner’s banking regulation report and the speeches of chief executive Hector Sants, is encouraging. Last April’s interim RDR report proposed a clear dividing line between sales and advice. This was watered down in November’s paper after heavy lobbying from the banks but it must be hoped the FSA’s new tougher line against the banks will influence the next consultation paper due in June.