The chairman huffs at moves to make the industry responsible for consumers’ grasp of financial services – an inevitable consequence when adults dress like children and lack basic maths skills.

“So how do we build on last week?” asked the chairman of the implausibly-sized investment company Second Coming Asset Management as we met up for a few pints of Honestly I Don’t Know The Lyrics Of YMCA By Heart at The Really Not Protesting Too Much. “We don’t,” I replied. “So would you mind changing out of those biker leathers and back into your suit?”

“Now then,” I began when the chairman returned a few minutes later, “what I really wanted to talk about today was consumer responsibility in the context of Her Majesty’s financial services industry – what do you think?”

“I think it would be a good idea,” replied the chairman, trying not to look too pleased with his answer.

“Oh, very Gandhi,” I nodded. “But while I have some sympathy with your underlying point, apparently the idea is a whole lot more complicated. Surely, one might think, the bargain is that product providers and advisers have a duty to deal with punters in good faith and, in return, punters should have a bit of a go at trying to understand what they are signing up for.”

“I’m not too sure about that first bit,” said the chairman. “But let’s see where you are going with this.”

“Well, apparently the new Financial Services Bill, which is being discussed by Parliament at the moment, contains a proposal that the new regulator should ’have regard’ to the principle that consumers should take responsibility for their decisions,” I said. (Scam continues below)

“However, the good, good people of the Financial Services Consumer Panel would seem not to be keen on the idea – as evidenced by their shiny new briefing paper, which explains why it is unreasonable to expect consumers to understand the detail of highly complex financial products and services and the risks for consumers this principle would create.

“Now, very decently, the panel concedes that ’clearly consumers need to act sensibly when making decisions about financial services’ – but then it goes on to argue that ’all too often the products they are being sold are so complex and the risks involved so obscure that it is impossible for them to make reasoned decisions’.

“As such, the panel argues the new Financial Conduct Authority should be able to make rules to impose fiduciary responsibilities on the industry, which would ensure consumers could be confident the firms would act responsibly and treat them fairly. ’At present’, it adds ’the financial services industry is beset by low levels of compliance with regulation and high levels of complaints’.”

”Would you mind changing out of those biker leathers and back into your suit?”

“Now they are just being mean,” huffed the chairman. “Everybody knows the high levels of complaints are down to the traditional ’small minority of offenders’ – the football hooligans of our industry, aka the banks – and, while I can think of a few phrases to describe compliance, ’low levels’ would not be one of them.

“Anyway, I find myself labouring under the impression that firms such as my own are already tied into all this responsible action and fair treatment malarkey by consumer law. I’m sure I also read something once about a Treating Punters Fairly initiative and don’t we even have some sort of fiduciary duty to our customers?”

“I think the law likes to keep things loose on that last point though I would argue the term certainly covers the adviser/client relationship,” I said. “Still, I would agree with everything else you say and, while I accept the Financial Services Consumer Panel probably isn’t arguing for complete abdication of responsibility, it probably should be careful what it wishes for.

“In a country where a substantial portion of the adult population dresses in ’leisurewear’ like children, eats fast food like children and apparently now has the maths skills of children, beginning the process of enshrining in law the principle that financial services is all a bit difficult for the poor little dears does feel, while sadly inevitable, something of a slippery slope – the camel’s nose in the tent.”