Sam Dunn: Financial services are still in the Jurassic era
Sunday 23 April 2006
Debates don't get much more impassioned than the one over whether to teach creationism and intelligent design in the classroom.
Fresh furore was provoked last week by the arrival in British schools of John Mackay, an Australian geologist who claims he has fossil evidence that disproves evolution, and will give lectures on his beliefs.
One part of the UK that could desperately do with a touch of evolution to shed its dinosaur approach to the way it often treats customers is the financial services industry.
Its reputation for sharp practice, being commission-driven, having rotten complaints handling and general shiftiness - in short, being huckstersaurs - is peerless.
You don't have to reach into the fossil record for its most recent misdemeanours.
In the past two weeks alone, the insurer Royal Liver Assurance has been fined £550,000 for mis-selling with-profits savings policies to elderly customers, and the Advertising Standards Authority has rapped the knuckles of British Gas for a TV spot that misled viewers over whether to switch to a rival service.
"Whoah!" I hear the cry go up, "you can't punish an entire industry - property, savings, pensions, investment funds et al - for the actions of a few bad apples."
Unfortunately, if you don't remove the bad apples immediately, the rot spreads. Let it go too far, and the reputation becomes well-earned.
A different sort of voice, that of the average consumer, reflects this. The anguish some financial customers feel. Seeking help for an endowment mis-selling query, a reader expressed anxiety about where to turn: to the insurer itself or the claims company?
In fact, he has no need of either, but his lack of trust prompted him to first get in touch with the Money desk.
Trust - or rather the absence of it - is a chronic problem for the financial services industry.
Baroness O'Neill of Bengarve, principal of Newnham College, Cambridge and an expert on the philosophy of trust, said in a lecture last month that the relationship between companies and customers was becoming critical, and fragile.
John McFall, chairman of the Treasury Select Committee, suggests that high-street shops like HMV are now more trusted by individuals than banks, insurers and building societies.
The committee is to interview members of the financial services industry next week as part of its inquiry into the design and regulation of the proposed national pension savings scheme. Alarmingly, insurers - those behind pensions and endowment mis-selling scandals who have largely abandoned cheap stakeholder funds because they're not profitable enough - want a major role running it.
The shape of the scheme is being forged over the next few weeks, and I share consumers' fears about trusting this part of the financial services industry.
Life companies may have the infrastructure to deliver but they have rotten form. I'd rather see the retail fund managers have a shot - the pensions industry needs somebody else in charge.
- 1 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 3 Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
- 5 Game of Thrones is most-pirated TV show of 2014
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Millions of Britons struggling to feed themselves and facing malnourishment
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
Immigrants make UK racist, says Ukip councillor Trevor Shonk
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
Day In a Page
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens