From the Editor: Maybe it is time for a fiduciary duty... on the banks

The head of the FSA’s consumer panel, Adam Phillips, caused a bit of a stir this week when he said the FSA’s treating customers fairly (TCF) project had failed to protect consumers and called for the introduction of a fiduciary duty on firms to be enforced by the incoming Financial Conduct Authority.

He didn’t say so explicitly, but it is safe to guess Phillips had one eye fixed firmly on the banks, who continue to receive a ridiculously-large number of complaints from customers.

This is partly to be expected, given the relative size of the largest banks compared with other retail financial services firms and the wider range of services they offer.

But what is also telling is the proportion of complaints upheld against them – 63% in the case of Lloyds, 44% against Santander and 43% against Barclays, according to the latest figures from the Financial Ombudsman Service.

As a sign that little has really changed since the introduction of TCF, Phillips’ remarks reminded me of a speech made by Clive Briault, then FSA managing director of retail markets, at a British Bankers’ Association conference in 2004.

“We remain concerned about the treatment of consumers of retail financial services, including in retail banking,” he said, speaking when the concept of TCF was still new.

“We see reward systems that incentivise sales forces and branch staff to deliver volume targets without any measurement of the suitability and the quality of those sales.”

If the FOS’s figures are anything to go by, TCF has not worked and Phillips is right.