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Honesty and humilty in financial intermediation, or how to be successful without fucking over the masses

In an age of ever increasing complexity of financial products we are simultaneously in an age of increasing financial illiteracy. As investment banks create ever more sophisticated products like Collaterised Debt Obligations the industry pulls itself increasingly into expert-only territory.

There is a famous book "Where are the customer's yachts?" which is great. Today, in our me-centric world, a view might be, "Where is my fucking Boxster", or rather, "Where is my fucking Boxster S with black leather seats, air-con, variable valve timing and ipod docking port?" The financial industry succeeds in making it's members fabulously wealthy whilst ripping maximum cash out of hapless consumers.

Loyalty does not exist in this industry. No it doesn't. Want proof? Seven years with a bank, sticking with the rules, try losing your job for a few months and see how they view your request for cover. David Mamet says a great thing about Hollywood that applies to finance - "In Hollywood there is an expression, 'to get ahead you need to be flexible' but the full quote is actually: 'to get ahead you need to be flexible. Bend over.'" As with the movie industry, so with the finance industry. McDonalds, Disney, Nike, Nintendo, don't insult their customers for a lack of knowledge in food preparation, entertainment, footware design, software, but banks deliberately confuse and distort information to the benefit of advisors pockets and to the discomfort of the public. What kind of industry succeeds by launching great new savings products to get people to sign up then freeze rates as interest rates go up, relying on inertia on the part of their customers. Who does such a thing?

Copyright 2007, Robert A Innes