A poor excuse for financial services

I am becoming rather worried at how little it takes for me to be thrown into fits of apoplexy. It could all be to do with encroaching old age, I suppose. Except that my anger mostly manifests itself when I am forced to listen to the financial services industry's excuses.

My most recent fit followed the publication of a document by the Consumers' Association (CA) earlier this week into "disclosure". This is the term used to describe the supply of financial information, such as charges and commissions, which policyholders need to know before they buy a particular product.

The CA report, written about in more detail elsewhere in this section, argues that the existing disclosure regime has failed to help consumers.

The information we are provided with, and the way we are given it, conspires to make it no easier for us to really understand what product providers are doing with our money. In fact, mistrust of the entire financial sales process is so rife, the CA found, that we tend not to read the product particulars even when it is relatively well presented.

The CA concludes that some form of rating system where benchmark figures are used to compare and rate products would simplify matters considerably. Minimum product standards, such as maximum charges, flexibility and so on, are another idea put forward in the report.

All this is something The Independent has been campaigning for ever since we began publishing analyses of the life and pensions industry by John Chapman, who devised one such scheme several years ago (John's latest survey appears this week).

The CA's findings are so sensible that one would imagine financial regulators falling over themselves to support them. But no, the Personal Investment Authority (PIA) - the front-line watchdog responsible for protecting consumers - can't quite bring itself to do that. The PIA is reported in one publication as simply "noting" the Consumers' Association's views.

Wow. Each year, hundreds of thousands of policyholders are unable to understand the information they are given and buy inappropriate and expensive products. Meanwhile the PIA, whose inadequate disclosure rules have led to this position, "notes" attempts to suggest better alternatives.

Perhaps its reactions come from the same stable as those of a financial adviser who this week blamed the CA itself for consumers' ignorance.

According to him, the public feels ignorant not because it is given the wrong information badly, but because it is given any information at all. If we weren't told anything, we would have nothing to be worried about. Ignorance is bliss, in other words.

One can only hope the CA's report finds its way into the hands of people marginally more sympathetic to the concept of consumers as intelligent and rational human beings.

Meanwhile, the financial services industry might reflect on the fact that had punters been better informed and had the products sold been of a high standard, it would not be facing an pounds 11bn bill to compensate victims of the pension mis-selling scandal.