A Matter Of Trust
09th July 2012
Trust is a fickle thing. It was not too long ago that the local bank was the bastion of British trust, a place where respected bank managers offered a tough but fair assessment of your finances and did not miss a trick in protecting the family fortune, however large or small. Well, that was the perception at least.
How times change. A cursory glance at the press this weekend and you would be forgiven in thinking that most banking leaders are direct descendents of Beelzebub and their employees little more than servants of all manner of ills.
This of course is more than a little harsh and for every snake there are thousands of decent hard-working individuals who are just doing a days’ work as best they can. Whilst tarnishing all bankers with the same brush is of course wrong, the problem is that just at the time that some banks were starting to put the previous crises behind them, along comes the “Lie-bor Gate” revelations and everything turns from bad to so much worse.
Manipulation of LIBOR, the interest rate at which banks lend to each other or borrow, is a serious issue and undermines the very fabric of modern day banking. Whether or not the general public have actually been inconvenienced or lost money remains to be seen, although initial indications are that those perpetrating the deed were looking to reduce the rate rather than increase it, but this is not the point.
The point is that if you cannot even rely on LIBOR, then what can you rely on? Certainly not banks IT systems as the RBS / NatWest debacle has shown us, which has plunged many ordinary peoples’ lives into chaos for reasons no one quite seems to yet understand.
Even the PR savvy HSBC were getting hammered in the weekends press for strange lending decisions, outrageously long decision making processes and whispers that their advertised claims are a little “muddy”.
As another friend railed at me last night over dinner as he tried to reduce his mortgage with HSBC from £400,000 to just £100,000 without much joy,( in words that are unprintable here); as more people look to withdraw their valuable savings from larger lenders and support the more local, traditional Building Societies; as the current investigations into rate fixing threaten to involve the Bank of England itself, the banking community has to embark on a PR exercise roughly akin to that of Al Qaeda remodelling themselves as a progressive, socialist green party trying to elect a female leader.
In other words, the average person on the street has little if any trust in British Banks. That is a travesty, both socially and economically. I feel sorry for the vast majority of banking staff, both at the top and ground level, that I meet who genuinely just want to do a good job for the consumer and could not be more different to those who are portrayed by the media.
Eventually the decent will prevail.
If, however, the perception is at present that banks cannot be trusted, (even those that give advice, albeit limited as it is to their own products), then the public need an intermediary body of professional advisers that can be. They need independent advisers who understand their needs, who work hard to fight their corner and ensure they do not get the wrong products and who are transparent in their workings and accountable for their advice.
The good news is that this does exist. The cowboys have been driven out by regulation and industry intolerance of their actions, leaving an adviser community as strong and trustworthy as it has ever been. Professionalism and transparency punctuates the adviser community these days.
It is important that our industry ensures that a single, simple message is delivered to the general public. You do not have to put up with shoddy service and Independent advice is alive, well and thriving.
After all, it’s all just a matter of trust.
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Andrew Montlake, Director and Spokesperson for Coreco, gives his honest and forthright views on the mortgage market, economy and all things property related. Monty was voted "Mortgage Personality of the year 2008", "Best Press Spokesperson" in 2011 and is the current holder of the British Mortgage Awards “Best Marketeer” title. Expect expert analysis, delivered in a down to earth style with a side helping of exuberance.