One thing is clear: despite claims to the contrary, and according to a variety of research sources, public trust in the financial services sector continues to be low.
The man on the street blames the financial services sector for the state of the economy and this mistrust has been only compounded by recent mis-selling scandals. Indeed, solutions to this inherent mistrust, such as increasing product transparency and financial education, continue to be hotly debated. At the risk of sounding like a broken record, what I find staggering is the lack of action to remedy this, years after the issues were first raised.
But I do take great heart in recent developments. Things are moving, slowly but surely. The FCA will be able to implement new and stricter powers on financial products ensuring customers are finally treated fairly. And following the House of Common’s report on financial education and a petition of 118,845 signatories calling for it to be made a compulsory part of the school curriculum, the Government is having to take financial education more seriously.
In this vein, it’s also clear is that we need to cultivate a growing sense of personal responsibility in consumer financial services. Whilst the industry is culpable in some instances, the consumer too needs to be more aware of the risks. After all, the industry can only go so far in ensuring customers receive a fair deal. Consumers also need to take responsibility for their actions. The Association of Financial Mutuals is one such company that recognises the need not only to educate but empower and is the first trade body to launch its own consumer website ‘Owned by You’. The website has a double role, both educating consumers on the benefits of the mutual sector but also encouraging the consumer to take a more active part in organisations that they are a member of.
This theme of responsibility is reflected in many of our clients 2012 campaigns, such as the Zurich Big Decisions report, which looks at the UK’s decision making process. The report shows that attitudes towards life and financial planning are changing. What is clear is that the current economic situation has meant that we are delaying the big decisions in life such as getting married, having children or longer term financial decisions, like buying a property. Instead we have become a nation of ‘short termists’ concerned with getting by on a day to day basis and how we pay our next bill.
Preferring to keep our options open we are, through the inevitable inaction that follows, failing to take responsibility for our life decisions. The report’s author, Professor Michael Hulme, concludes that as a result Britain is ‘heading for a crisis’.
This is not to deflect from the industry’s own role in helping us to make financial decisions, both ensuring transparency and educating customers but it is recognising the need to encourage the man on the street to play some part in his or her own life plans. This is particularly pertinent in light of the economy and the reality that the state cannot and does not always provide.