Sadly, the genesis of the current culture of the financial services industry was spawned out of Gekko's phrase. Be it banker, insurer, trader, intermediary, wholesaler or retailer, the die was cast for a roaring ride of self-serving indulgence that left no margin underexploited and no commission unclaimed.
The financial services industry has since tried to convince the world that fear is also a positive force. It has been the main driver for many financial product purchases over the years, including the PPI mis-selling debacle. Few other human endeavours would be comfortable to have 'fear and greed' as an appropriate strapline, let alone be proud of it, as in the case of financial services.
So, what should we do about what appears to be a dangerous situation, where the financial services industry regularly uses practices that would be unacceptable in other areas of society?
Firstly, the industry needs to remove itself from its state of denial. It needs to take responsibility for issues such as lawyers and accountants referring their clients to companies in exchange for commissions, and address the bias this exposes customers to.
A greater alignment with customers is also required. For example, to ensure the client pays directly for the service purchased, and is not confused by fee-bundling, intermediation, cross-subsidies and other tactics. The changes that are due to be implemented in January as part of the FSA's Retail Distribution Review will go some way to resolving this requirement for clear pricing.
The bonus culture has quite rightly been attacked in recent years, but the financial services industry continued to take a massively disproportionate slice of the UK bonus pool in 2011. Few firms have yet taken the obvious route of paying the compensation through salary, with a bonus being just that _ an exceptional addition to normal take-home pay that is neither expected nor planned for. This approach will lead to better alignment with consumers and a move to a more professional culture.
While the industry has too often turned to the regulator to solve our problems, clear and firm regulation is nonetheless necessary. The medical industry, for example, is regulated largely by one piece of paper. Yet financial services at the height of its 'soft touch' regulation period in 2008 was regulated by 2,500 staff at the Financial Services Authority under published rules containing more than 1.5 million paragraphs. More concise ?guidance would help restore trust in a hugely tainted industry.
Modern society cannot survive without a fully functioning financial services industry. It employs more than two million people, or 10% of the national workforce, paying over £63 billion in taxes. The industry's net export earnings, at £47 billion, are greater than all other industry sectors combined. We all need a safer, less volatile, more secure financial future. This can only be delivered by a financial services industry acting on behalf of its customers, and not itself.
Andrew Fisher (pictured) is chief executive of wealth management firm, Towry
