When Regulated Worlds Collide

I am a family lawyer. My brother is in the financial services industry. Sometimes, when we meet for lunch on a wet weekday and talk about our jobs to one another, we look across the table and realise its not just that we are talking different languages but that we come from different worlds (professionally speaking - if you met us you would see how closely we are related). Some things are so familiar, whilst other things are just anathema. Both of us deal with process and propriety but our respective colleagues deal with them so differently. So we go back to our dim sum and to entertaining ourselves with mild griping about our respective spouses and gossip about mutual schoolfriends, where we are on familiar and safe ground. And then we go back to work.

I should probably also mention that my dad was a bank manager before his retirement. Not your modern day "computer says no" bank manager, and not your pinstriped champagne quaffing wheeler dealer commercial banker, but a real high street bank manager, with a significant discretion to lend based upon proper and personalised face to face assessment of risk, reliability and affordability, and built upon relationships. Not a "relationship manager" jobsworth, but a professional with a service ethos and a genuine care for his clients and his employers' businesses and interests. A bank manager who worked his way up from the paper bag in the middle of the road and wanted to help hard working people make good too. So I didn't know much back then about the deregulation of the banking market, but I remember the 80s and the 90s from the perspective of a sleepy eyed little girl whose daddy came home late from work, stressed about lending targets that could not be met without foolish lending, and sales targets (for products made necessary to meet the risk of the lending) that could not be met and about change that made no sense, and about the unseemly scramble to promotion by younger colleagues with a different compass...and from the perspective of a teenager who heard her father worry about how he could make his bosses listen to sense whilst still making sure that the mortgage was paid. The mortgage was paid. The banking industry changed. My dad was one small man left behind. And we all know how the bigger story ended.

Anyway, I took the opportunity over the Xmas break to attempt to complete a lengthy list of tasks that are utterly impossible to complete whilst holding down work. One of them was to "sort the mortgage". Oh how naive of me.

Now I knew as an adult that the world of financial services is pretty tied up in regulation because once upon a time a long time ago I got a mortgage. And I knew that things had gotten a little but more tied up in regulation because of the stuff that was going on whilst I was growing up, and whilst I was benefiting from too much accessible credit as a student (hic). And when I last remortgaged it was in the middle of a hideous swirl of post-baby crisis and both micro and macro credit crunches - and I thought it would be better this time round.

But my god. It is like TORTURE getting a mortgage these days! Hoop-jumping tick-boxing choose-the-least-inappropriate-of-an-exhaustive-list-of-inappropriate-answers fricking torture!

I'm sorry, but this is arse covering on a grand scale dressed up as consumer protection. And the costume is about as convincing as Widow Twanky (sorry, freshly back from Panto).

So. You ask a bank for advice about their mortgage products. But their "advice" about their mortgage products cannot extend to a comparison of how those mortgage products will apply to your circumstances. Nah ah. Because that would enable you to weigh up the pros and cons, the risks and the benefits, in the short and long term - and to genuinely make an informed decision as a consumer. So clearly - that must be prohibited.

Far better, say the powers that be, that at the outset of the three hours of telephone calls (during which they ask you for the SAME information that you have provided on first enquiry, and obliging entered for a second time into a glitchy web app in advance of the telephone appointment for the express purpose of shortening said three hour telephone call, of which they already hold about 90% in any event as you are an account holder) - at the outset of the telephone call they ask you how much you want your mortgage to cost, how many years you want to repay it over, and how much would you like your fee to be (amongst other fatuous questions)? To which the answer of any rational human being will be 1) as little as possible 2) as little as possible and 3) as little as possible. BUT I'd like to see all my options so I can assess whether I'd like to pay a little more now to reduce my risk later or whether this is the best option all things considered.

And you're trying to work out what the hell the questions mean and how you can possibly give an honest answer to a question predicated upon your attitude to the risks of a hypothetical scenario the facts of which are unknown. And they're trying to be empathetic without ever acknowledging their script is a load of codswallop. And you're trying to give the answers that you know they need to make the computer move to the next screen, and they're trying to stick to the script. It's like the lobster quadrille.

BUT, you plead : BUT I'd really like to see all my options so I can assess whether I'd like to pay a little more now to reduce my risk later or whether this is the best option all things considered.

But no.

BECAUSE, GOOD PEOPLE OF THE PLANET FAMILY LAW (Brace yourselves) : HOLISTIC EVALUATION OF ALL OPTIONS IS BANNED ON PLANET FINANCIAL SERVICES! [I Pause here to note for the benefit of "foreigners" from other planets holistic evaluation is a cultural phenomenon which is explained at the foot of this post. See *]

What kind of insanity is this?

The kind of insanity that will not let you get to the next question by answering "well I can't really answer that without knowing a bit more" or "well the answer to that depends on how much it will cost me" and which forces you to answer in a specified format in order to progress to ind out the actual cost of any single option.

The kind of insanity which then, when it actually spits out an answer of "mortgage x over y term at z rate of interest will cost you £x per month and £y overall" - will not let you ask the question "Okay, so what if we extended the term?" or "Okay, so can you tell me what the options are for a shorter fixed term?". Or, to be pedantic, you can ask the question Madam, but you's talking to the hand.

Because. (have to pause here, I'm hyperventilating). Because. I have recommended you a product on the basis of your answers about your attitude to risk and I cannot recommend you a product which does not match your preferences.

Oh, you mean the phoney preferences forced out of me by your insanely restrictive backside covering compliance machine in order to get any information from you at all? The ones that I know you are painstakingly noting down on your system and reading back to me like a script as a basis for your "recommendation" and will rely upon if I ever complain about miss-selling and the FSA or FSO ever come to town on your ass? The ones which serve no possible purpose for consumers at all other than to confuse, irritate and obsfuscate.

Yes. We are too stupid to have and assess the information and yet should we complain we have been missold it will be our own answers we will be hung out to dry with. Or perhaps it is just that by maintaining a stranglehold on information and bringing us to the point of emotional exhaustion we are less likely to find the energy to shop elsewhere having invested the better part of a day of our Christmas holidays in extraction of the nugget of truth that is *the recommendation*. In for a penny, in for a couple hundred grand, eh?

Yes, those dudes in Financial Services could do with some holistic evaluation. More Re B-S and less BS.

It is linear analysis gone made in the world of financial services. And even worse than that it's linear analysis without the facts being found first. And without the analysis either. Straight stupid.




* Holistic evaluation for not-family-lawyers

In 2013 the Court of Appeal handed down several judgments which emphasised the need to holistically evaluate the available options before reaching a decision on important matters (in this case the possible adoption of children). In Re B-S (Children) [2013] EWCA Civ 1146 the court said this at pa 44 :

We emphasise the words "global, holistic evaluation". This point is crucial. The judicial task is to evaluate all the options, undertaking a global, holistic and (see Re G para 51) multi-faceted evaluation of the child's welfare which takes into account all the negatives and the positives, all the pros and cons, of each option. To quote McFarlane LJ again (para 54):

"What is required is a balancing exercise in which each option is evaluated to the degree of detail necessary to analyse and weigh its own internal positives and negatives and each option is then compared, side by side, against the competing option or options."

One thought on “When Regulated Worlds Collide

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