FEAR OF FINANCE

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The Independent Online
A thought struck me with some force as I wheeled my trolley through Sainsbury's the other day. Why, is supermarket shopping so much easier than shopping for financial services?

The weekly supermarket run really couldn't be simpler. If you want Colombian decaffeinated coffee, frozen filo pastry and a packet of stuffed green olives (I appreciate you may question my diet at this point) all you have to do is follow the signs and take your pick. Or you can ask a member of staff for help.

Every product has a label telling you what's inside, how many calories, whether it's good for you and even how to get your money back if you don't like the taste. Contrast this with the hassle of purchasing financial services products.

You know where you are with frozen peas and even if you don't there is a helpful picture on the front of the packet so you should know exactly what you're getting. You can't say the same for many financial service products, even for supposedly straightforward saving plans. Rival products compete for attention, making all sorts of statements about projected growth rates, guaranteed bonuses, past performance figures and surrender values. You may be told how much your monthly premium adds up to, but you will find it harder to establish just how much of it is swallowed up by the salesman's commission.

And if you don't like what you've bought? The financial services sector usually offers a 14-day cooling off period. But beyond that point - and 14 days really isn't long, given the complications of certain products - you're pretty much on your own. Of course, you can complain to the regulatory authorities if need be, but be prepared for a long haul.

This highlights a fundamental clash of cultures. The consumer reigns supreme in the supermarket, whereas in financial services it is the technocrat. This must change, and it can.

Take the stock market, for example. Barely 10 years ago it was all but out of bounds to the man or woman in the street, a complex world with hidden codes and practices. Now it's a way of life for millions of small investors, made accessible by successive waves of privatisations, company share schemes and investment clubs.

The key has been accessibility. The small shareholder revolution has succeeded because the industry has made it easier for people to come on board. New issues are advertised in plainer English and shares can be traded over the counter at your local bank. You can receive direct opinions and help on what to buy or sell.

The barriers which prevent people buying financial products also need to come down. Why shouldn't the financial shopper be able to enjoy the same experience as the supermarket shopper? Consumers should be able to shop around for insurance, savings and pension policies just as easily as they compare different types of cheese at the deli counter.

Financial products should be simply and clearly labelled. Sainsbury's places menu cards along the aisles to identify ingredients for dinner parties. Financial companies could also use them to highlight products suitable for us in various stages of our lives.

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