Standard Life chief executive David Nish believes the RDR will boost the reputation of financial services and is key to the sector driving auto–enrolment and long-term care reforms.
Speaking at a fringe event on financial services at the Liberal Democrat conference in Glasgow yesterday, Nish financial services must help Government create social change by filling the savings and protection gaps.
He said: “A lot of industries don’t start with customer needs but we have a big opportunity to do that with big social policy such as auto-enrolment. It also means you have strategies that work. One of the big changes this year in January is the RDR so if you think about how financial services products have been sold over the past 20 years there has been an inherent financial bias induced because of commission, which has now been removed.
“We are beginning to get into the concept of transparency of pricing, i.e charged products, or advice based on fee, i.e sitting down and negotiating with your adviser. It is a fundamental change in financial services and it should help the backdrop of improving the reputation of the industry.”
Scottish secretary Michael Moore said the financial crisis was triggered by the behaviour of banks and cautioned against all financial services firms being “tarred with the same brush”.
At the same meeting Liberal Democrat MEP Sharon Bowles hit out at UK regulators for not having their “eye on growth” as they crack down on the financial sector.
She said: “The UK regulators don’t have their eye on growth. Despite the fact there is lip service to growth there is a desire to make sure there is capital above all else and it is not always best placed. Some of us are fighting it.”
Business secretary Vince Cable has attacked the “capital Taliban” at the Bank of England for stalling the recovery with excessive demands from banks.
The Bank of England has ordered certain banks to raise billions more in capital to meet financial stability requirements but faced stiff resistance from the sector.