William Kay: Banks' excessive charges will hardly win confidence in their services

Charcol sale signals dark times for IFAs

The banks, which have been ominously quiet of late, are beginning to emerge from their cave, growling and snarling. When the Office of Fair Trading dared to suggest this week that they ought to cut their charges to retailers for handling credit-card receipts, they threatened to raise the cardholders' annual charge to a pocket-draining £30. Reason: they have to make money somehow. This from a bunch that collectively declared profits of more than £20bn last year.

The banks, which have been ominously quiet of late, are beginning to emerge from their cave, growling and snarling. When the Office of Fair Trading dared to suggest this week that they ought to cut their charges to retailers for handling credit-card receipts, they threatened to raise the cardholders' annual charge to a pocket-draining £30. Reason: they have to make money somehow. This from a bunch that collectively declared profits of more than £20bn last year.

And do you remember the fuss four years ago over banks' plans to charge for drawing your own money from a cash machine? It turns out that some banks are simply selling batches of machines to independent operators who face no public ignominy for imposing such charges.

And I hear it doesn't stop there. Plans are being dusted down to revive charges for cheques. At one time banks used to charge about 25p per cheque, offset by a theoretical rate of interest credited to accounts. If you left enough money lying around in the account, you would pay no cheque charges - a sort of blackmail really, but one that made no dent on bankers' consciences. The charge and the interest were abolished in 1985, in a mad dash to offer free in-the-black banking.

Now the word is that there never was such a thing as free banking, it was just an illusion to be swept away in the new moral crusade in favour of transparency. I think that this is one case where most bank customers will trade a little transparency for less cost. Doubtless when charges are reintroduced they will be accompanied by a move to interest rates on current accounts. At present, all the big banks except Halifax/Bank of Scotland have accounts paying a nominal 0.1 per cent, and have been wrestling for years with trying to find a way of paying a proper rate without losing money.

But any move to raise charges must be matched by better service. And the most glaring scandal is the number of days banks take to transfer money. Alan Hughes of First Direct, HSBC's telephone bank, says competitive pressures will prevent any bank making the first move on this, so it will have to be driven by legislation, as in Sweden. This is a sad commentary on banks' attitudes towards customers, and it is hard to see any government making the time to push through legislation enforcing what should be good practice anyway.

The banks are in a right mess over charges, partly because the Treasury wanted employees' wages paid direct into bank accounts as a security measure. This brought in millions more account customers, but they were not necessarily the most enthusiastic users of bank services.

The basic problem is that many, possibly too many, people in this country do not value financial services. That is the banks' real task: to give the public a sense of receiving a worthwhile service.

I wonder why they don't?

* On 1 June we will enter a new world where marketers of dodgy investment funds will no longer be able to fiddle their past performance - allegedly.

The Financial Services Authority, which once upon a time regarded such numbers as the work of the devil and completely irrelevant to gauging the future, has grudgingly accepted that most investors find it hard to commit themselves without seeing a track record.

The trouble is that human nature, being as it is, highlights the period for a fund or trust that it finds most flattering, a custom known as cherry-picking.

The answer, says the FSA, is "standardised data, set out in a table, showing discrete annual returns for the previous five years." These figures must be expressed as a percentage, a perverse stipulation, given that all surveys show most people don't understand percentages. But since when did a little thing like that matter?

Charcol sale signals dark times for IFAs

This week Bradford & Bingley placed the biggest bet so far about the future of financial advice, when it put its Charcol Independent Financial Adviser service up for sale.

The group's 1.1 million windfall shareholders, of whom I am one, should be happy because its shares rose 18p to 285p on what amounted to news that it was getting rid of dross.

A harsh way to describe a fine firm such as Charcol, but it is not a bad translation when your parent company says you are "not core" and should be sold. This has to be seen in the context of next year's depolarisation, when banks such as B&B will be able to "multi-tie" - link up with several competitors, sell their products and policies, and take a middle-man's cut.

Steven Crawshaw, the new chief executive of B&B, has decided that multi-tie is the way to go. The group's other IFA, The MarketPlace, will be turned in that direction to cater for the mass market.

The message for consumers is that if you are going to insist on hiring an IFA in future you will probably pay through the nose for a hopefully sophisticated service.

This is very much in keeping with the Financial Service Authority's wishes, as it has made clear that it wants and expects most people to go to their bank for financial services - a recipe for a huge mis-selling scandal.

The one glimmer of light for IFAs is that Aegon, the Dutch life and pensions group, is still an enthusiastic buyer of advisory firms and cannot understand why anyone should be selling.

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