Market Comment 3rd May 2010 PDF Print E-mail
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Written by TrigoldCrystal Marketing Manager   
Friday, 07 May 2010 00:00
If you remember the series ‘Yes Minister’, you may also remember an episode called ‘The Right to Know’ in which the civil service, embodied in the immortal character of Sir Humphrey Appleby, shows the hapless Minister Jim Hacker that sometimes it is better not to know something than have full disclosure end you up in hot water. Sir Humphrey’s argument was that even though sometimes people have the ‘right to know’ this is not always the same as the ‘need to know’. A distinction which is useful when looking at a recent report from the FSA on complaint handling. The recent report ‘Review of Compaint Handling’, reports the FSA’s investigation into:

“…several banking groups responsible for over 70% of the complaints firms receive and report to the FSA and over 60% of those resolved by the Financial Ombudsman Service (FOS).”

As a result of this review “five banks have are undertaking major changes to the way they deal with complaints and two of the five banks have been referred to enforcement for further investigation.”

What is significant about this report is that, as other commentators have noted, none of these banks have been named. The often overlooked issue which arises for the intermediary market is that a significant part of the arrangement of a financial product is an understanding of the product providers' service. Don’t consumers, and intermediaries in particular, have a right to know when a provider’s complaint handling process is not up to scratch and the failings are fully acknowledges but the FSA?

Not only that. In this case it seems clear that as the banking groups represent such a huge part of the market, there is not only the right to know but also, as intermediaries are unknowingly sending their clients into contracts with these organisations it seems the need to know about the service clients can expect is a no brainer.

Such weak statements as “…the FSA did find examples of good and compliant practices in parts of some of the banking groups assessed. This demonstrates it is possible for banks to handle high volumes of complaints and deliver fair outcomes for consumers”, makes it sound that the banks simply dodging the bullet by getting it right sometimes which is probably more down to luck than judgement.

It seems to us a there is a clear case that even if there is not the legal right to know who these organisations are, the need to know is overwhelming and surely outweighs the any arguments against disclosure. The intermediary market runs the risk of putting more clients into contracts with these providers which we view as unfair treatment of clients.

Sir Humphrey was hardly an advocate for openness and transparency but we think even he would be hard pressed to find a convincing argument for the secrecy the FSA is advocating in this case.
Last Updated on Tuesday, 11 May 2010 08:15