So queries our MD Giles, when he turned his hand to a bit of journalism for Financial World recently. The article is part of a series of contributions from luminaries such as John Moulton and Gillian Tett entitled ‘Flying in the face of conventional wisdom’ . Here’s what he had to say:
As the banking crisis has shown, size is no guarantee of positive outcome for the financial services consumer. It made no difference that RBS or HBOS were gigantic or had previously earned annual profits equivalent to the GDP of small nations. They took correspondingly big risks and the results have been painful. But it did not need to be a crisis to show that big is bad. The whole premise of the large organisation ‘manufacturing’ a range of products to cross-sell to the consumer is flawed. With few exceptions, the businesses inflicting the highest charges, offering the poorest value and carrying out the most widespread mis-selling were the biggest ones - whether banks, insurance companies, fund managers or financial advisors. Years of getting away with hard-selling poor products and services to under informed consumers made the growth of these leviathans possible. As the giants of the financial services feel the pressure of more discerning consumers, armed with better knowledge through the internet, there is something of the supertanker about them. Huge size, ancient legacy IT, bureaucratic structure and a creaking culture stifle innovation and make for cumbersome ships to steer. This is in contrast to the new services and improved value offered by smaller, faster new entrants born to serve the informed consumer better, in narrow niches, without trying to be all things to all men.