Things go wrong in financial services, as they do in all industries: it’s how you respond to your critics and (most importantly) your disillusioned consumers that matter the most. Unfortunately, the financial professionals who deny culpability, attack journalists and blame victims are doing their industry’s image no good. This arrogance, if left unaddressed, will undermine a sector that can help people so much
What is the role of a financial blogger today? It is a question I ponder regularly.
I could opt for an easy life. The number of commercial offers that come my way could mean I’d never have to write an original, editorial piece of journalism ever again.
Oh, the temptation to convert the Young Money blog into a glorified advertising platform! What would this blog look like if the posts were calculated solely to attract advertising dosh? Click-bait, anodyne “guides” crow-barring in SEO keywords…it would be a fabulous moneymaking machine for me but in the grand scheme of things, nothing more than a glossy parasite clogging up another corner of the internet.
So I go for the slightly harder, possibly barmy but (I hope) more ethical option. I want to experiment with keeping this blog non-profit and subsidising it with outside journalism, public speaking and more straightforward corporate work for principled clients I trust.
Many people I meet are baffled by this approach. They don’t always realise that I’m not motivated primarily by making money and that blogging doesn’t just have to be an extension of the financial sales industry. Unfortunately, there is (still) very little grasp of the potential of financial blogs, so expectations for this small but growing field are set at a rather low level.
I try to explain (probably unsuccessfully!) that as a working journalist, I make no distinction between the work I do online and that in print. And part of a traditional journalist’s job is to hold companies to account and call out dubious acts by those who have vast power over our lives. The financial sector is omnipresent in our lives, exerting huge influence over our long-term prospects. The tragedy is that many people will never fully realise how important it is to scrutinise financial companies and their conduct (and support journalists/whistle-blowers who do) until it is too late.
As with many specialised industries, the financial sector takes advantage of something known as “information asymmetry”. In non-bullshit, this means that financial companies know more about money matters (and their products) than the customer does, so we have to trust them to use that knowledge to help us. That means designing products that can be properly understood by your average guy or gal. To eliminate – wherever reasonably possible – the chances of something going badly wrong and leaving us worse off as a result.
The name of the game is not for companies to set us a test – can we figure out how to use a product correctly? Can we navigate the complicated, jargon-rich small print and spot the trapdoors that will open up when we least expect them to? Can a company merely cover its back and carry out transactions for maximum gain with minimum responsibility?
We all know when we’ve had a cowboy builder. We think we’ve picked the perfect man for the job, but he botches it, overcharges us, walks off into the sunset and leaves us nursing our wounded pride and a big hole in our finances. (Or maybe that was just me last year.)
It would be wrong and too simplistic to compare financial companies to dodgy tradesmen, but there is a parallel in how specialists use their knowledge – to either help us and accept a fair price in return, or to cash in without proper consideration for the customer.
Unfortunately, the latter is happening far too often in a sector that was supposed to have cleaned up its act in the last decade. But instead of facing up to those failings, and demonstrating real contrition, two rather sad trends persist among some financial professionals…man-splaining and victim blaming. In fact, the disputes that occur often pale in comparison to the callous and one-sided reaction they generate from the financial sector.
I recently wrote a piece for the Mail with Ruth Lythe on how a former businessman was left with a pension pot worth £3k when it would have been valued at £100k if a tranche of lucrative shares hadn’t been sold. This blog is not the place to retread the story, and all relevant facts are in the article here. But it’s astonishing how defensive, chippy and downright Trumpian financial advisers can be when met with black-and-white evidence of a poor outcome for a consumer.
The response from financial professionals on the likes of Twitter and LinkedIn can be summed up thus: it serves the customer right. The only person at fault in this scenario, without any shadow of a doubt, was Mr Eddom. He should have read the small print. He shouldn’t have left the country. He should have kept very close tabs on what the company was doing with his pension. Anyone who doesn’t follow the (often unknown instructions) of How to Be the Perfect Financial Customer (handbook length: approx 1 trillion pages) should never go public if they feel they’ve been let down by a company. What possible right does he (or indeed I) have to draw attention to hugely problematic small print or big decisions taken without customers’ consent? And how is it in the public interest for us to know about these cases? (Real answer: massively so.)
At its heart, financial services has a big problem. It’s populated mainly by older white men, some of whom cannot admit that this homogeneity is leading to group-think, a disconnect with customers and poorer results in the long run. This is not to say that older white men can’t be highly innovative decision-makers and wonderfully empathetic communicators (I have met many who tick these boxes). I’m talking about a mindset – being open to new thinking, accepting that things can be done differently. The financial sector is by no means unique in this respect. But judging by my online trolls, I have a horrible feeling that this industry has its fair share of broflakes who can’t stand the merest whiff of a challenge to the status quo.
For instance, I was told by a mansplainer-in-chief how I should REALLY be doing my job. He said that I should be doing a guide on how members of the public can avoid getting screwed over by (presumably) people like him. Brilliant! Guys, don’t worry about financial companies. They’ll just do what they do. Let them get on with it, undisturbed, while we try and figure out how to NOT let their antics derail our lives. What a dreadful doctrine.
Most companies and individuals I come across DON’T take this attitude. I believe most are trying to do the right thing for customers, often in difficult circumstances where they’re working with poorly educated customers, unpredictable markets and products/regulation that struggle to reflect the real world. Indeed, the situation I reported on is not a simple dichotomy between good and bad, right and wrong. It highlighted a difficult dispute where a customer felt they hadn’t been properly served by their company. Looking at the evidence, as I did for six months in the run-up to publishing the story, I concluded there was a case to answer (as did Money Mail, which does not run these stories without justification).
But the reaction it received from financial professionals made me MUCH more worried about the state of our industry than the case itself. I was told the story couldn’t possibly be right. I was told financial companies don’t work for free as I don’t like to do – that was someone referring to my recent publicised exchange with a company soliciting my services for nothing. However tenuous or silly the personal brickbats may be, nothing is left off the table in an attempt to discredit and marginalise journalists who don’t solely write puff pieces praising the industry.
There is ample journalism out there highlighting good products and services, some of it even crossing the Chinese Walls that should exist between editorial and advertising. And my blog for the past seven years has encouraged people to take responsibility for their money, to be careful with their money and their dealings with financial companies.
But I don’t want the financial sector to refuse that it could (indeed, must) do more to win our trust. I don’t accept the dodgy precepts of those who need to look in the mirror and make sure, each and every day, that they’re doing the right thing by their customers. And I don’t want young people to feel that whenever something goes wrong with their finances, it is always unambiguously their fault.
And chaps, you’re doing your industry NO favours by lambasting customers and journalists who are trying to raise valid questions about what you do. So enough with the man-baby act. Let’s listen to each other, accept what we can all do to improve and get on with the job – making this industry as open, accessible, trust-worthy and fair as it can be.
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