The Monday Interview: Ron Sandler

The man investigating the long-term savings industry is willing to step on the financiers' brogue-covered toes
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The Independent Online

Those listening carefully in the Square Mile over the past couple of weeks will have heard the sound of knives being sharpened, in readiness for the counter-attack after Britain's first heavyweight investigation into whether the UK's £1,500bn long-term savings industry rips off its customers.

The man charged with this Goliath-like task is Ron Sandler, who shook up the Lloyd's of London insurance market in the mid-1990s, and was parachuted in to try, ultimately unsuccessfully, to save NatWest from a takeover by the two marauding Scottish banks. Now his job, handed down by the Treasury, is to investigate why there is so much evidence that consumers do not get a good deal off investments, from with-profits policies to unit trusts, and do not understand basic details of their contracts.

Mr Sandler, 49, has a reputation for being bright. He was awarded a First in engineering at Cambridge University, having arrived on a scholarship from Rhodesia. He is not afraid to speak his mind but isn't known as a people person.

There was no evidence of this directness last week when he spoke about wanting to "create an industry that we can be proud of and in which consumers can trust".

But he is willing to tread on financiers' brogue-covered toes in his search for evidence of bad practice from Britain's insurance companies and advisers. He says: "It is my intention to consult as widely as possible, but you can't talk to everyone. There are sections of the industry who feel under-consulted, before we have even begun. This is inevitable and you can't get too concerned about it."

Reeling from crises of pensions mis-selling, the meltdown of Equitable Life and under-performing with-profits investments, Britain's financial services industry is awash with reviews about what has gone wrong. In addition, the Government faces the extra challenge of encouraging people to save more for their own pension.

It might seem that the man carrying out the long-term savings review has been sat down by Gordon Brown and advised about what it would be useful for him to find, preferably in time for next March's Budget. There is nothing the Government would like more than to point to evidence that it is getting to grips with City fat cats and their hefty commission charges.

Not so at all, says Mr Sandler, who asked the Chancellor directly whether there was a Government agenda behind the review. "I was assured that I could do a fully independent and wide-ranging review." But he would eschew "nirvana-like solutions" citing the "realities of politics and industry structures" as potential restraints.

He will also not be held down to a timetable of finishing his ambitious research. "It may be unrealistic to assume we can deliver recommendations by early next year, but if it goes beyond the middle of the year it will lose momentum," he says.

The determination to be independent could lead to a clash with the Financial Services Authority, possibly over the future of with-profits policies, a particular area of concern for Mr Sandler. A public disagreement between the FSA's chairman, Sir Howard Davies, and their new man would not look good to Treasury mandarins, but Mr Sandler says he is prepared to risk it.

Is Mr Sandler likely to recommend legislative changes? He won't say, arguing reasonably, that it is important to start with a "clean sheet of paper". He is no doubt keen to gain the confidence of an industry which has already been coruscated by critical reviews conducted by Don Cruickshank and Paul Myners.

He says he will be conscious of burdens of industry and also favours leaving markets to sort themselves out, but adds that "is not worth doing if you are just tinkering around the edges".

It is understood it was Mr Myners who recommended Mr Sandler to the Treasury, after the two gelled when they were both on NatWest's board. Mr Sandler has also been a long-term associate of Sir David Rowland. The famously gruff chairman of Lloyd's was the architect of the Reconstruction and Renewal programme to resolve the row with thousands of Names and brought Mr Sandler on board to help. People who have worked with him say he did well at Lloyd's but did not stand out at NatWest, where he only had a short time to learn his brief before the Royal Bank of Scotland deal was done.

Mr Sandler will be devoting one day a week to his Government project, as he also is chairman of Computacenter and an unquoted derivatives business called Kyte Group.

He says he does not like full-time executive positions these days, perhaps because he associates them with the showdowns he had to deal with at Lloyd's and NatWest. But the man who can make rumbustious Lloyd's Names back down has earned his reputation for toughness. Taking a knife to some of the abuses inflicted on consumers by companies would also be politically expedient. No wonder financiers are marshalling their defences.