Andy Haldane, Chief Economist at the Bank of England (BoE), has given an honest speech that outlines some of the bugbears he has with the financial services sector.
Speaking at the New City Agenda annual dinner in London, Haldane revealed he finds BoE publications and speeches too complicated. And he admitted his own speeches suffered the same problem, describing them as “likely to be impenetrable to most”.
He went on to say that he feels maths education needs an overhaul to relate it to real-life scenarios, and believes that much more needs to be done for banks to win back the “social licence” from a distrustful public.
Bloomberg described the speech as Haldane’s “mea culpa” and “the most self-conscious step to date in a campaign … to restore public trust after the financial crisis”. But some financial advisers were offended by suggestions that, according to Haldane, they “have no clue either” about changes to pensions.
Desperately poor basisRozi Jones focuses on just that in an article for
Financial Reporter. Setting the scene, Jones quotes Haldane: “I consider myself moderately financially literate. Yet I confess to not being able to make the remotest sense of pensions. Conversations with countless experts and independent financial advisors have confirmed for me only one thing – that they have no clue either.”
Haldane concluded: “That is a desperately poor basis for sound financial planning.”
“I confess to not being able to make the remotest sense of pensions"
Perhaps not surprisingly, this riled Andy James, Head of Retirement Planning at financial advice firm Towry, who is quoted in the article. “I am disappointed that Mr Haldane feels the advisers he has been speaking with do not understand pensions,” he said. “Frankly, in my opinion, he has been speaking to the wrong people.”
Towry said the industry is “well versed in pensions” and that financial advice is “really the only option” for people without understanding or confidence in the financial system.
Financial Reporter article
Re-orienting the school curriculumJake Cordell, reporting for
City AM, chooses a different theme of Haldane’s speech to focus on: education.
Summing up Haldane’s comments, Cordell says children are being “put off” maths and that policymakers need to increase the subject’s relevance, linking it to “real-world decisions”.
In his speech, Haldane said that a lack of maths education is leaving some children with “an educational scar”, which can cause problems when these children need to make financial decisions in adulthood.
Cordell quotes Haldane: “Re-orienting the school curriculum in [a] more practical direction might help. What better set of real-world decisions [to study] than financial ones: how to draw up a monthly budget, how to make sense of an annual percentage rate on a loan [and] how to decide between competing savings, pensions and mortgage products.”
City AM report
Yawning gapHuw Jones draws yet another theme from the speech for his
Reuters article.
“Britain’s banks must bridge the ‘great divide’ with a distrustful public to maintain a well-functioning financial system that supports growth,” he summarises, borrowing one of a few of Haldane’s buzz phrases.
Another that Jones picks out is the “yawning gap” – Haldane’s description of the disparity between how banks see themselves and how the public see them. According to Haldane, descriptions of the financial services industry as “self-serving, greedy, corrupt and destructive” made by members of the public at a 2015 conference “underscore just how far finance still has to travel to regain its social licence”.
On the subject of trust, Jones draws attention to Haldane’s portrayal of financial services in relation to other industries. “With a looser personal touch, banking began falling behind hairdressers and doctors in the personal trust stakes.”
Since the financial crisis, said Haldane, the financial services sector has dropped from “mid-table mediocrity to relegation-threatened remorse”.
Reuters comment
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