Posts Tagged ‘Financial services reputation’

Financial services fairness not just a PR stunt

Tuesday, October 16th, 2012 by Jon Clements

Where would you place financial services in your list of “industries I both love and trust”? Let’s be clear: such a glowing reputation has been desperately elusive for the sector in recent years.

Yet the rather unsnappily-titled Retail Distribution Review (RDR) – now entering the lexicon because UK financial advisers will behave differently with their customers in terms of advice and the way they charge from the start of next year – has been designed to protect (and help transform the financial sector’s wretched reputation with) the public.

But studying to comply with the RDR – as FT columnist and former broker, Merryn Somerset Web – is doing, can have the perhaps unintended side-effect of revealing more unsavoury facts about financial services.

In her most recent column she describes her course of study as “a depressing experience…charting the dismal record of greed, fear, corruption, incompetence and ignorance that is much of our financial industry.” Strong words from  someone who continues to make her living in the arena.

And yet among the array of pernicious financial products on the market including derivatives and a tax avoidance product called a single premium life assurance bond, Somerset Webb has seen something which…say it quietly…offers “hope”: a new fund called the Battle Against Cancer Investment Trust (Bacit) doesn’t come with charges, offers an annual  charitable contribution of one per cent plus a fund manager “stumping up for a percentage of the expenses”.

A cynic, or maybe a realist, would – as the writer acknowledges – “dismiss the whole thing as PR”. But she’s not so quick to do so, suggesting this new financial fund has something different at its heart than fleecing investors.

And so, even in places not normally associated with philanthropic behaviour, there may be surprises. But rather than being merely a sop to CSR, such moves can make commercial sense too. Analysts are increasingly looking at investment targets influenced by sound Environment, Social and Governance factors.

Rebuilding the reputation of a company is difficult enough, never mind that of an entire industry sector. Examples such as the Bacit provide a hopeful hint that the will exists in the sector to balance the unbridled making of money with doing the right thing. Demonstrating commitment to a higher purpose than profit alone is what the best corporate reputations are made of.

 

 

 

About Jon Clements

Jon Clements is a Chartered PR consultant specialising in B2B PR, corporate and marketing communications and is the founder of Metamorphic PR. Connect at: JonClements ''

Financial services’ reputation crossroads

Wednesday, June 29th, 2011 by Jon Clements

Goodbye Financial Services Authority; hello Financial Conduct Authority – but how much does this really mean for reputation improvement in financial services?

It’s a hot topic this week, as the FT reports the promise of the FCA to be “tougher…bolder” and to “intervene earlier”, unlike its infamously “light tough” predecessor, which failed to prevent the financial crisis in the UK banking system.

The FSA’s Margaret Cole, director of enforcement and financial crime, summed up the stark reality for financial serviceswith the analogy:  “If a supermarket sold rotten food to its customers, how long would it stay in business?”

And, just today, a Reputation in Financial Services conference is focusing on ways the sector can “rebuild the relationship of trust with the public”.

tweet from the conference, via Tony Langham of Lansons Communications – quoting Stephen Hammond MP – asserts that “regulation is a tool of international business performance and therefore reputation”. By that, you would assume that regulation was the panacea for the financial sector’s reputation sickness.

But, as reported by Insurance Age, Kay Blair, vice chair of the Financial Services Consumer Panel, has described the required shift in regulatory effectiveness to be a “quantum leap”. She said: “…the causes [of misconduct in financial services] are systemic, built in to business models, rather than random events. By addressing suspect business models and potentially toxic products, a more effective regulator will nip problems such as any future PPI in the bud well before consumer detriment escalates and certainly before consumers have lost millions of pounds.”

So, in between the hill the regulator needs to climb and the public’s trust in financial services floundering, what are firms in the sector to do?

As long as there is a disproportionate emphasis on brand building (think Meerkats), this is a manifestation of external image, which may not necessarily equate to establishing a sound reputation, which is the more compelling and enduring reason customers choose to do business with you or not. Building – or rebuilding – reputation begins at the core of what an organisation does, hence Kay Blair’s apposite reference to “business models” being fundamentally at fault.

Investing in corporate reputation may involve a business sticking its neck out and standing up for what’s right for its stakeholders. This is crucial as stakeholders – defined in another tweet from today’s reputation conference – are “anyone who can bugger up your company”.

 

About Jon Clements

Jon Clements is a Chartered PR consultant specialising in B2B PR, corporate and marketing communications and is the founder of Metamorphic PR. Connect at: JonClements ''