What a year is in store for those of us who make a living from the financial services industry – be it financial planners, company employees and of course plain old journalists like me. There will be no time to rest on our laurels, that’s for sure.
While 2016 may have appeared tumultuous, 2017 is going to provide us with another rollercoaster of a ride, maybe a more stomach churning one than last year.
Donald Trump will step into the presidential shoes and focus on making the United States great again, even if it means upsetting the Chinese. Expect the unexpected. Expect a more dangerous world.
Populism will take grip across continental Europe while in the UK we are going to edge ever closer to the door marked Brexit. It is not going to be a comfortable journey, that is for certain. Uncertainty will dominate as political differences bubble to the surface.
In the UK, economic growth is likely to falter although another recession should be avoided, primarily because debt is so cheap and accessible. Indeed, some commentators are now talking of another credit bubble building.
Imported inflation will eat away at people’s household finances, further dampening economic growth. An increase in the base rate should not be ruled out although whether that is translated into better returns for savers remains a moot point.
The UK stock market, hitting new heights, is unlikely to sustain its bull run although market gurus have been saying the same about the US stock market for quite a while. I could be wrong and the UK stock market could march ever higher but if the economy starts to creak, earnings and dividends will come under pressure, damaging market sentiment.
What would I like to see the financial services industry deliver this year above all else?
Certainly, customer service, especially among the big financial brands, needs to improve. Poor service remains a plague despite attempts by various regulators (Ofgem and the Financial Conduct Authority) to stamp down on it.
Mick McAteer, a consumer advocate and an ex-board member of the FCA, recently sent me some research results on how consumers view the financial services industry and those that sit in its boardrooms. They did not make for comfortable reading.
The work, conducted by 3R Insights (of which Mr McAteer is a director), indicates that the public do not believe financial services bosses care enough about the quality of customer service they deliver or the value for money they provide consumers with. This is irrespective of provider – bank, insurer or investment firm.
Furthermore, most customers have little or no confidence in financial services companies putting customers’ interests first or treating customers fairly
Low levels of consumer trust in financial services, says Mr McAteer, are fuelled by various factors. They include excessive boardroom pay, high product charges and a massive disconnect between the boardroom and the customer. The major conclusion drawn from 3R Insights’ work is that out-of-touch financial services bosses are primarily to blame for the industry’s poor reputation.