The financial services industry needs to focus less on new business and more on servicing existing customers.
That's the conclusion of Watson Wyatt's latest Debating Forum, where a lively debate headed "This house believes that the focus on new business sales is damaging to our industry and hence is detrimental to consumers" resulted in a 59% vote in favour.
And more than 90% of delegates believed that new customers are judged more important than existing customers.
In other findings from the forum, delegates expressed real scepticism over the FSA's Treating Customers Fairly initiative:
To what extent do you think the FSA's Treating Customers Fairly initiative will influence our industry's standing with consumers?
• Positive contribution - 30%
• Neither positive or negative contribution - 48%
• Adverse impact - 22%
To what extent do you think a move towards fee-based remuneration would change consumer perception of our industry?
• Improvement - 57%
• No real change - 30%
• Deterioration - 13%
In five years' time, how acceptable to consumers do you think remuneration through up-front commission will be seen?
• Acceptable for all product lines - 17%
• Acceptable for some/limited product lines - 74%
• Not acceptable under any circumstances - 9%
Mike Williams, senior strategy consultant at Watson Wyatt, commented: "It is of considerable concern that so many in the industry remain sceptical about the TCF initiative.
“We held a Debating Forum in April 2005 where 46% of the audience believed that TCF would help to restore faith in the financial services industry. Experience over the intervening 18 months has, if anything, dampened this already limited enthusiasm. Our view is that TCF requires a change of culture in most companies if it is not to be relegated to a box-ticking exercise of little value to companies or their customers. But culture change within organisations is, of course, notoriously difficult to achieve."
