Little more than 20 years later the mobile phone is truly universal. Most business people carry not only their main phone but frequently a blackberry or similar data device. Equally most children will now have a mobile from around the age of ten.
By comparison, in 1986 before the original Financial Services Act took effect, financial advice was available to consumers from a panoply of different sources such as high street banks, direct sales, industrial branch advisers and what became IFAs.
Over the intervening period a succession of regulators has presided over a catalogue of disasters almost too long to list, including pensions mis-selling, with the considerable contrivance of the then government, through endowments, split caps and structured products culminating in an abject failure to regulate the excesses of the mortgage market before millions were encouraged to adopt levels of debt that they could never afford. The net effect of which has been to undermine consumer confidence in personal finance products and make true advice the preserve of the modern equivalent of those early adopters of mobile phones.
The nation’s savings ratio has collapsed and yet the regulatory answer is to effectively take a leap back to the middle of the 1980s and establish a two-tier regulatory approach that will allow the soft option of a guided sale, where banks and insurers can avoid the inconvenience of a regulatory process to protect the consumer. Witnessing the FSA’s roll out of their latest plans I detected a definite touch of “we think we’ve got it right this time” with at least some FSA speakers holding their fingers firmly crossed behind their backs. In a style worthy of Gordon Brown’s days as Chancellor the FSA skated over much of the detail in the conference presentation only for the true facts to emerge when people read the detailed documentation in the RDR paper 08/6.
Those in the group market could be forgiven for believing that corporate advisers will be exempt from all the sweeping changes that look set to radically transform the individual sector, although not necessarily for the better. This is not necessarily the case as tucked away discreetly at the end of the section on Adviser Charging is paragraph 4.46 which states that the FSA will explore imposing the charging and fees regime they propose for Group market and individual business.
Even without the intervention of the FSA, increasing numbers of advisers and providers in the group market have been developing powerful training and education content to assist scheme members in understanding their benefits and identifying the action they need to take.
Ironically the technology that can by comparison so starkly demonstrate the extent of failure of financial services regulation has the potential to deliver the solution. As identified above most people have a mobile phone almost from the age they can read and write. Today mobiles are of course so much more than mere phones, offering a wide range of data services including e-mail, mobile internet and the ability to run audio and video files. Their universal adoption makes them the ideal platform for education and advice services.
Using mobile internet services group pension providers and advisers should be able to deliver a wide range of information and services to just about every member of a scheme. I believe this is beginning to make a case for delivery to mobiles to take precedence over delivery to other online channels. Consumers’ relationships with their mobile phones are one of the most active they maintain. They take them everywhere and use them daily, unlike their pension provider who they probably think about at best a couple of times a year. Given financial services so actively involves communications (and the respective track records of the underlying industries), should government consider abolishing the FSA and passing their powers to Ofcom?