OpinionFeb 10 2016

Consumer is king

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I am often asked by vast pillars of the financial services community to sing for my supper.

I do it – public speaking – not for the pocket money (very occasionally I get paid), nor for charity, although Brathay Trust has done quite well from my ‘singing’ over the past four years.

Nor do I do it because I particularly enjoy it. Far from it.

Looking back, the only speeches I have really enjoyed giving were those to celebrate the departure of Martin Ritchley from the helm of the good ship Coventry Building Society (I managed to extract a laugh from a room of building society executives which is quite an achievement, I can tell you) and one I gave to a conference of mutual bosses in Gdansk, where most of the delegates did not know what I was rattling on about, which was perfect.

Public speaking is 10 times, no 100 times, more difficult than putting pen to paper. Abuse is guaranteed, immediate and often vitriolic. I remember a particularly fraught breakfast encounter with a bunch of building society chief executives in the Midlands when I was harangued from start to finish.

To add to the pain, I do not breathe in the right places. I become a bag of nerves. If only I possessed a smidgen of the talent that the late Terry Wogan had (I loved that man).

Most of the time I speak at dinners and conferences because the financial services industry wants to understand how their businesses are viewed from the outside. By the general public, readers of the Mail on Sunday.

I do it because I think I should. Not because I want to. Public duty and all that, although I find it rather alarming that big chunks of the financial services industry seem oblivious to what really turns customers on – value for money, backed by stellar customer service.

A couple of weeks ago I was honoured to speak at a gathering of the ‘Vampire Squids’ at the Bleeding Heart restaurant in London, in its time one of my favourite lunchtime drinking holes (no, I do not do it any more).

Of course, vampire squids are deep-sea cephalopods that journey the world’s tropical oceans. It, the vampire squid, is also a name given to investment bank Goldman Sachs by journalist Matt Taibbi.

Writing in Rolling Stone magazine in 2009, Mr Taibbi said: “The first thing you need to know about Goldman Sachs is that it is everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

The vampire squids I encountered at the Bleeding Heart were far more pleasant. They were no more than an eclectic mix of financial services experts that like to meet every so often to chew the financial cud and make sense of the world they make a decent living from. They are fronted by the delightful Lucian Camp (a leading brand consultant).

It was an intimate affair, expertly organised by squidministrator (her title, not mine) Frances Delhoy of independent consultancy Le Beau Visage (sadly, the only female present).

Lucian wanted me – surprise, surprise – to talk about the issues that currently rankle with readers of the Mail on Sunday. So I shot from the hip.

I expressed consumers’ desire for better savings rates, cheaper energy deals and for their pensions (and associated tax breaks) to be well left alone.

I described their dissatisfaction at the lamentable customer services standards prevailing across much of the financial services industry (independent financial advisers are an honourable exception in this regard).

ScottishPower, Npower, Vodafone. All companies – too big by half – that have lost the personal touch and reduced customer service to a lottery. Whenever I mention one of these companies in the pages of the Mail on Sunday, I said, it triggers a volley of complaints from disgruntled customers.

I also lamented the constant focus on the new customer at the expense of the long-standing customer whose only reward for loyalty is to suffer excessive insurance premiums or endure rock-bottom savings rates. Readers hate this. They expect loyalty to be rewarded, not abused.

I finished my speech on the need for the financial services industry to stop digging holes for itself. Only hours earlier I had been speaking to a wonderful gentleman (Hein Pretorius) who was involved in a horrific road accident last summer, resulting in the amputation of his right leg. Although he had protection insurance, the two critical illness policies (from Legal & General and Royal London) would not meet his claim because they only covered the loss of two limbs, not one.

Although new policies from both insurers would have covered him for the loss of his leg, Mr Pretorius’s cover was taken out a while ago. At no stage had he been offered the opportunity to update his policies – either by the insurers or the advisers who originally sold him the cover.

At no stage had Hein been offered the opportunity to update his policies - either by the insurers or the advisers

Every vampire squid present at the Bleeding Heart (and their guest) shared my opinion that in such situations insurers should adopt a common sense approach and give the claimant the benefit of the doubt. It is not as if Mr Pretorius was cheating the system. He rightly expected that the loss of a leg constituted a sufficiently ‘critical’ condition to trigger a successful claim. Who in their right mind would not agree with him?

By applying rigidly to the terms and conditions in his outdated policies, Legal & General and Royal London have done the financial protection insurance cause great harm. They have cast the whole industry in a bad light.

Yes, they are technically right. But on every other level, they are wrong. It is why I will continue to sing for my supper, in the hope that the financial services industry will at some stage see sense. The consumer is king.

Jeff Prestridge is personal finance editor of the Mail on Sunday