You’ve got to have faith
Financial services has chequered past and advisers need to embrace professionalism to restore trust in consumers
Similarly, it is not very impressive to claim that you are treating customers fairly because being fair and open is good for business. It is a win-win situation, mutually beneficial deal is it not? It may be that there is a business case but if that is your motivation then that is not being truly ethical either. It is ultimately conditional and I am afraid to disappoint readers but this consultancy jargon is just another over-hyped marketing or public relations exercise. And guess what? Customers can spot a corporate vision statement and the next scheme for earning behavioural Brownie points a mile off. Nothing erodes trust like good quality insincerity.
We love the quick fix, so when the regulator starts talking about building consumer confidence as a core objective, imposing the retail distribution review and requiring a statement of professional standing from all advisers, we reach for the usual remedies. Ethics training is the new fashion. Yes, great, let us give everyone half an hour gap-fill and, hey presto, they will be ethical. What a waste of money. For while I am an enthusiast for having awareness of the ethics raised within examinations and in continuing professional development, no one can possibly imagine that a few simple classroom or online exercises will have any impact on the habits of a lifetime. Dream on.
I heard an adviser mutter the other day that RDR would change nothing and the same old practices would carry on. It is a very sad commentary on an intense regulatory enterprise, but it may be true. If it is, then trust and consumer confidence is very unlikely to improve and industry certainly suffers in terms of extra regulation and falling business.
On a practical note, I have championed for many years the concept of an ethics mark or badge that differentiates ethical and trusted advisers from the rest, and is difficult to obtain, relative to the compliance benchmark. This has successfully been taken up by a few. It allows the public to differentiate with something beyond the usual regulated assurances with which the public, quite understandably, have become somewhat disenchanted. And it is likely to continue even with a change of regulatory name. Such a scheme gets the public connected and ready to ask what exactly amounts to acceptable and ethical behaviour in financial services
For me it is a matter of belief. It goes back to the sense of place. No one is pretending that advisers do not need to make a reasonable, but not excessive, living just like anybody else. It is probably true, but impossible to prove, that more ethical practices will draw in a whole range of new business from people, like me, who are widely under-protected, provided for and under-invested. The market is enormous and people can be reassured enough and confident enough to take decent, low-cost advice. Goodwill flows very readily once trust is re-established.