A clear and present danger, but for who and in what form?

When I was a kid (very many years ago, but yes I was a kid once) the 1950’s was a very different world to the one we see today. As was the sixties in my teen years – I must have been there too as I “cannot remember it” as the saying goes!

We had lead pipes, asbestos lined buildings, no central heating, single glazing and our milk and coal was delivered by a horse drawn cart. We had schools you would walk or cycle to – on your own, mothers were almost always married and at home looking after their children. Fathers went to work to support the family.

Toilets were mostly outside the house and froze in winter, toilet paper was very hard, ambulances, police cars and fire engines all had bells and one blue light.

Streetlights did not light up the night sky and in some places were still gas powered. Bombsites from the war were everywhere in Essex and London, we played outside, football boots came above your ankles with leather nailed studs and were made (not kept) soft with dubbin. The ball we played with could cause brain damage it was so hard and heavy.

Knees, elbows, heads and hands frequently bled from falling over or fighting and Manchester United played in a ‘grey and white’ strip.

We played outside, un-abducted, un-assaulted, and un-afraid. We knew not to talk to strangers, play on railway lines or with unexploded bombs, not to vandalise property, to respect your ‘elders’, teachers and the police. We actually knew who our father was too.

We could, very importantly, add, subtract, multiply and divide and knew how to work out change in pre-decimal, pounds, shillings and pence Britain.

We could, also very importantly, read, write, express ourselves when asked to, we could eat with a knife and fork, sit at a table until given permission to leave, knew when to say please and thank-you. We could use a toilet, clean our teeth, wash our hands, and be at school on time in our clean school uniforms. Our caps had peaks facing to the front and our homework was done (in my case often with much parental…… shall we say ‘encouragement’!).

The ‘Labour Exchange’ dealt with the ‘unemployed’ and not ‘job seekers’ or ‘clients’. Hospitals had a casualty department, not a ‘triage unit’, which quickly helped those with serious injury and not a ‘nosebleed’.

The police were respected because they were actually walking the streets, they did do something in the unlikely event that you got assaulted or robbed and you could go out and leave your doors and windows open.

Hospitals did not kill you with lethal bugs as they were actually cleaned and managed properly The National Health service got you better. It did not consider it part of the service to remove tattoos or deal with making breasts bigger, smaller, sex changes or penis enlargements on grounds of increasing self-esteem.

‘Vulnerable consumers’ were around then too, but were mostly made up of those who were in fact a business danger to avoid as mostly they were feckless, would not or could not pay.

The heart of 50’s financial services was the City, men wore three piece suits and bowler hats to go to work, women if they were unmarried and without children were secretaries (or as Al Murray would have it ‘nurses’) something that seems simply unimaginable today, and financial markets were driven by a code of “my word is my bond”.

Banks looked after your money, building societies would help you save and give you a mortgage to buy your home if the branch manager felt you were likely to pay it back. Workers had final salary pensions and jobs for life as long as they did not punch or kill their work colleagues.

If you actually had some money to invest, that found it’s way to a stockbroker who really did understand it was your money not his.

Solicitors had clients and dealt with ‘matters’, insurance companies had policyholders and their agents personally looked after their long term insurance and savings needs weekly and banks had customers who deposited money and wrote out cheques to pay bills. Petrol was less than 5/- or 25p a gallon in today’s money!

I could go on, but I think you get the drift by now?

That was austerity, even though Harold Macmillan did reckon we had “never had it so good”.

‘Regulations’ was a word that applied to the military and the railways. ‘Regulators’ were something to control gas or water flow.

So what kind of world have we created today in what is considered to be an advanced and hi-tech nation, and is it working?

Well, on planet “Financial Services UK” it is not.

It is now a complicated, highly regulated, automated, risk averse, all blame, all claim, sometime cynical and very expensive place to live and work.

The gainers now all work in regulation or offshoots of it, not in entrepreneurial business creation.

Losers, who pay for the gainers cosseted lifestyles are the many small regulated businesses and of course eventually the ‘consumer’ (previously known as clients, customers and policyholders) to whom the cost is passed on.

Command and control is still located in the “Dark Star” at Canary Wharf. It is a parallel universe that previously and possibly still will, with a ‘new crew’, reflect the agendas of the unaccountable being imposed upon the accountable.

And their mission is to boldly remove from the ‘consumer’ all danger, menace and potential for loss ensuring positive ‘outcomes’ (a word that now replaces results) for all.

Very laudable, but this is the same universe that sees the exact opposite being applied everywhere else in the society of second millennium. Morality has plumbed new depths, men often being seen as reckless fathers, rapists and perverts, women seen as objects of abuse. Respect and consideration for others has all but disappeared. The laws, rules and rights in society are no longer fit for purpose.

The public perception of the financial services industry today, partly of it’s own making and very partly due to failed regulators and regulation over many years, is seen as a version of mafia run Las Vegas in the fifties and while all this is going on we see a nanny state hell bent on creating rules and laws that are mostly unenforceable or go unenforced.

Today, financial services is being subjected to the genetic re-modeling of its DNA to remove forever the gene thus ensuring consumers may never lose out- ever, irrespective of merits.

The ‘outcomes’, that fantastic new word describing something previously known as ‘results’, are already being seen.

Mark Garnier is already urging the TSC to conduct a review of the RDR due to the mass-market reduction in easy access to financial advice, especially in light of RDR enforced adviser remodeling and bank withdrawals from the advice sector.

Financial services businesses are there to help their clients and in providing a great service they rightly should prosper and most importantly make a profit.

A financial services business, any business in fact, should treat its customers well, if not what is the point of being in business?

But businesses, financial or otherwise are not a social service. It is a fact of life that sometimes “shite happens’. The world we live in contains ‘Baldrick’s” as well as “Abramovich’s’ and reality is that no matter how hard you try you cannot remove risk from life and you cannot always protect people from themselves.

As an industry we must accept that despite all best intentions, ‘knees’ get cut and occasionally people suffer terrible injuries or worse.

But these do not always happen with intent, they are frequently an accident and in today’s ‘regulated’ world an accident means that somebody else pays for their lack of attention, consideration and careless or reckless actions. Anybody that is except the ‘consumer’ and of course the regulator who was supposedly on guard.

Are we better off as a result of past regulation, Possibly not, I think most regulated industries are now in failure disarray because of, or maybe in spite of, regulation – this never happened in the 50’s.

Financial services regulators should wake up and smell the commercial coffee.

If we carry on the way we are there will be no financial services industry left and no incentive to innovate, enter it or develop new products. It will be destroyed by a sterilizing regulatory radiation cloud emanating from Canary Wharf and not Brussels, as David Cameron would suggest.

Firms should value, cherish and appreciate the wealth and success a well-run business with happy clients can bring.

Regulators should concentrate on those that do not and learn to recognise that blame should sometimes sit at their door, or that of the “consumer”.

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