Shane Mullins, principal of Nottingham-based Fiscal Engineers – who in 2012 spearheaded a campaign to restore trust and trustworthiness in the industry, in association with Financial Adviser and other industry bodies – said faith had to be earned.
Published earlier this month, the FSCS report, undertaken in partnership with Professor Nick Chater from Warwick Business School and research consultancy Decision Technology, made four recommendations on effective steps that could collectively be taken to restore consumer trust.
However, Mr Mullins said: “I remember Professor Chater giving a speech at a financial services conference four years ago. He stressed back then that clarity and comparative information are absolutely essential when consumers are making investment choices.”
Mr Mullins commented that the Trust Index, produced by Nottingham University Business School’s Centre for Risk, Banking and Financial Services, had been making a similar point to Mr Chater’s for years now.
However, according to Mr Mullins: “It seems the industry really doesn’t want to hear the message. Without wishing to get too political, I think it says a lot that the publication of this report comes hot on the heels of the head of the IA basically being forced from office for being pro-consumer.”
Mr Godfrey, who had been chief executive of the IA since October 2012, stepped down last month following a backlash to reforms put forward to increase transparency, resulting in key members of the body threatening to leave.
Mr Mullins added: “Trust is the bedrock of every relationship, and can be taken for granted for only so long before it’s eroded to the point of non-existence. As an industry, we have to prove once and for all that we truly value trust – and the only way we can do that, as the report suggests, is to earn it.”
The 18-page FSCS report, Mind the Gap: Restoring Consumer Trust in Financial Services, showed that only 36 per cent of UK consumers have trust in financial services firms, according to the Edelman Trust Barometer.
It also showed that consumers believe that firms are capable of acting in consumers’ interest but choose instead to act in their own interests.