I said yesterday that I’d carry on with the blog I was writing about how regulation screws up our ability to communicate with our customers and prospects.  Which it does, and often in ways which are simply all downside for everyone – ways which make good clear engaging communication impossible, while at the same time not actually providing consumers with any worthwhile protection.

But I must admit,  I haven’t got the energy or enthusiasm to carry on with it.  And the reason is that once again, a couple of buckets of cold water have been poured over my burning zeal on this subject – in the form of two horrible new stories demonstrating how, whenever we financial people find what looks like an inch of room to manoeuvre free from regulatory supervision, the manoeuvre we’re most likely to perform is to put our hands into our customers’ pockets and remove money from their wallets.

The first bucket actually made it to be lead story on the TV news last night and is to do with Lloyds TSB’s  £28 million fine for operating a sales incentive scheme that encouraged branch staff to mis-sell.  Actually, if I wasn’t feeling so demoralised, I could probably manage an on-the-one-hand-on-the-other-hand piece on this, saying that there’s nothing wrong with selling or with sales incentives in principle, and quite often when we receive outstandingly good service in shops and restaurants it’s because those responsible are trying to make their sales targets and collect their bonuses.  But I would then have to go on and admit that on the other hand, there’s a lot wrong with such practices when you have a corrupt and exploitative culture that treats your customers with contempt, and then I’d feel more demoralised again.  So I won’t.

The second bucket – mentioned briefly yesterday – is this really depressing annuity business.  Without going into all the details, a new report details how, very often, the moment when people retire and convert their pension savings into an annuity is the only moment in their lives when they’re dealing with a lump of money big enough to be of interest to the rogues and vagabonds of our industry.  The reason it’s “of interest,” of course, is that it’s big enough that they can carve off a very decent-sized slice for themselves without the retiree noticing.

So they do.  Big, respectable life and pensions providers do their best to roll their pensions customers over into their own brand of annuities, even though far better terms might be available elsewhere.  And small, dodgy intermediaries, recognising the loophole in the post-RDR charging arrangements which allows them to carry on taking unlimited commission provided, weirdly, that they don’t offer any advice, provide feeble online execution-only services and help themselves to up to 7% of the retirees’ pension funds.  All of this, it’s said, deprives retirees of at least a billion pounds a year.

Quite frankly, when it comes to complaining about over-regulation in areas such as communications, the never-ending sequence of these depressing stories just cuts us off at the knees.  It’s very difficult to deny the charge that wherever there’s a stone unlifted by the regulator, there’s going to be nasty wriggling things (with or without the can) underneath it – and that the only way to keep us honest is to box us up as tight as the proverbial kippers (whose freedom of movement is in any case restricted by the fact that they both dead and smoked).

I suppose that even for many perfectly decent and generally honest people, it’s just too tempting – unengaged and trusting consumers toddling into their offices, so to speak, with wads of cash in every bulging pocket and no sense at all that they’re on the point of dropping bundles of the stuff on the floor.    Oscar Wilde said he could resist anything except temptation.  I’m afraid the same is true of far, far too many people in positions of trust in financial services today.

Bravely, the FCA seems to have decided to ask people involved in the world of financial promotions about the problems that result from regulation.  That grinding, clanking sound you can hear is the sound of floodgates being opened:  a tsunami is about to hit Canary Wharf.  The problems that regulation creates for financial promotions are roughly on a par with the problems that carbon monoxide creates for breathing, or that blindfolds create for playing snooker.

The danger, of course, is the old sheep/goats wheat/chaff issue:  among the thousands of gripes and grumbles, will the regulator be able to sort out what’s really important from what’s merely stupid, pointless and irritating?

From my own perspective, if I was allowed to raise just one single issue in this consultation, it would be the one mentioned in my headline.  At the moment, in the world of advice, probably the regulator’s No.1 theme is “suitability” – the FCA is emphatic that everything about the advice process, and the documentation thereof, should be built around the principle that every recommendation must be demonstrably “suitable” for the client’s particular needs.  That’s why, for example, the FCA is insistent that advisers shouldn’t maintain a relationship with a single platform provider but, instead, must work with two or three.  If a single platform had 100% of an adviser’s business, then by definition we could never be sure it was “suitable” for all the adviser’s clients.

Frankly, to me, this principle is pretty hard to apply sensibly even in the world of advice.  If you say that advisers have to rethink their selected investment platform for every client, why stop there?  Why not rethink their chosen word processing or spreadsheet software?  Why not rethink the restaurant they use for the annual client lunch?   Frankly, while others may be keener than me, I’m not crazy about my own adviser’s beard and moustache:  in the interests of suitability, perhaps he should shave before we meet.

But while the principle of suitability in the world of advice seems debatable, it creates huge problems and, I’d argue, massively unintended consequences in the world of direct marketing.  Consider three points:

1.  It makes one-to-one direct marketing communications – principally mail and email – virtually unusable.  We simply don’t know enough about individuals – even existing customers – to know whether a product or service is suitable for them  This, in turn, means that we can’t follow direct marketing strategies that rely on cross-selling, up-selling or on-selling over time.  And since it’s very often impossible to make a profit from an initial sale alone – at least without deplorable over-charging – that, in turn, means that we can’t execute direct marketing strategies at all.

2.  it means that it often becomes impossible to offer products and services that would unquestionably be of benefit to consumers.  Let me give you an example, slightly disguised in the interest of confidentiality.  I’m working for a firm planning to launch a new investment into the UK D2C market. The investment qualifies for inclusion within a SIPP, with all the tax advantages that SIPPs bring.  My client isn’t a SIPP provider, but we could perfectly well establish a partnership with a SIPP provider so that when people respond to the client’s direct advertising, we can offer a SIPP option.  Except that we can’t, because the regulator wouldn’t be happy that a single provider is always suitable, so we’d have to offer our customers two or three options.  Which would confuse the hell out of them.  So we won’t offer a SIPP option at all.

3.  In pathetic and pointless attempts to prove the we care about suitability, we have to cripple our product design and direct marketing processes with all sorts of stupid and useless clutter which serves no purpose other than ticking regulatory boxes – the whole business of risk profiling and attitude-to-risk questionnaires being the most widespread and preposterous example.  Sooner or later, in a emperor’s-new-clothes moment, someone will publish evidence to the effect that these approaches make absolutely no difference at all to the suitability of investment outcomes, but do a) put many providers off launching D2C initiatives at all, and b) put many confused and over-informed consumers off making investments in response to some of the few initiatives which do exist.

I think suitability has now suffered quite enough of a kicking for one blog, so I’ll stop there.

There’s clearly another side to this issue, which is what would happen to financial services direct marketing if those involved weren’t all terrified by the suitability issue:  released from our anxieties on the subject, would we immediately turn our energies and marketing budgets to flogging Guatemalan smaller companies funds to elderly couples eking out an existence on meagre fixed incomes?

Well, given the greed and dishonesty of troublingly large parts of the industry, I wouldn’t put it past us (see yesterday’s Financial Services Consumer Panel report on the non-advised annuity market for depressing corroboration).  But as things stand, at the start of an era in which I think we all pretty much agree now that we have to find better, simpler, cheaper, execution-only ways to supply financial services to ordinary people, I’m in no doubt that the cure proposed by the present regulatory regime is worse than the disease.

I’ll write some more about this tomorrow.

We Western whites love Nelson Mandela.  How much?  Very much.  Just look at today’s papers to see how much,

We Western whites hate Robert Mugabe.  How much?  Very much.  Just look at the last ten years’ papers to see how much.

Mandela led, and Mugabe still leads,  countries making the transition from white minority to black majority rule.

One huge difficulty affects the leaders of both, more or less equally.  The populations of both South Africa and Zimbabwe are deeply divided on tribal lines,  and leaders and political parties drawn from one tribe are pretty much bound to be in conflict with leaders and parties drawn from others.  As a northern Shona, Mugabe has always been on terrible terms with southern Ndebeles (never worse than during the early years of independence, when the country slipped into a savage civil war).  In South Africa, as a western Xhosa, Mandela was always on bad terms with eastern Zulus (again never worse than during the early years of independence, when the country came close to civil war).

But while these deep-rooted tribal issues torment both countries, there’s a huge difference when it comes to the relationships between their black and white populations.

Visiting South Africa a year or two ago, nearly 20 years after Mandela came to power, I was absolutely astounded to find the whites still completely dominant.  Every city, town and village from the biggest to the smallest was in fact two cities, towns or villages, a delightful prosperous white one where people lived in great luxury and comfort, adjacent to a miserable squalid black one where people lived in cardboard shacks.

I haven’t been to Zimbabwe, and it may be that black people there live in even more miserable and squalid shacks.  But whether they do or not, white people don’t now generally live like preposterously pampered princes among them, as they do across the border.  (The Times this morning told us that average white incomes in South Africa are still six times average black incomes.)

When we trumpet our appreciation of Mandela, I do wonder if we’re really saying that we love the way that in leading the black majority to power, he didn’t demand any real loss of wealth or privilege from the whites.  And when we howl our disdain for Mugabe, I wonder if we’re really saying that we hate the way that in leading the black majority to power, he demanded very great loss of wealth and privilege from the whites.

As a white person, I can understand why others might feel this way, especially considering the brutality of much of Mugabe’s ZANU-PF party’s treatment of many of Zimbabwe’s white residents.

But looking to the future, I think I know which country has the greater and more dangerous amount of unfinished business that’s still in need of finishing.

Sometimes, faced with a finished ad campaign, the experienced eye can detect clear traces of an issue that’s arisen during its development.

An example is the current Pru Health campaign, highly visible at the moment in the Tube and elsewhere.  The ads feature pictures of celebrities in their role as Pru Health “ambassadors,” alongside headlines highlighting some of the benefits on offer.  The three celebs I’ve noticed are Jessica Ennis, Johnny Wilkinson and Lord Coe.

All straightforward enough.  But here’s the interesting thing.  In Jessica’s and Johnny’s ads, the headlines are in inverted commas.  They’re things that Jessica and Johnny are saying.  Like “It’s fab how you get half-price gym membership with Pru Health.”  But Lord Coe’s headline isn’t in inverted commas.  There’s a picture of him, and a headline which says Get half-price gym membership with Pru Health.  He’s not saying it.  He’s there, but he’s silent.  This means that in the negotiations, his stance was that he was happy to act as a Pru Health ambassador, but not happy to provide a product endorsement.  And the agency and client wanted him badly enough that they were OK with this.

I remember from past experience that the question of endorsement is one of a number of tricky negotiating points with celebs.    The commonest stumbling-block is to do with usage in different media:  many are entirely happy to appear on television, but refuse point-bank to appear in print advertising or junk mail, which is a tricky problem for those trying to develop integrated campaigns.

(I remember a particularly painful example affecting NatWest some years ago.  They developed a TV campaign featuring a fictitious family,  with the main family members played by well-known actors – I think Timothy Spall was one.  None of these leading players agreed to appear in any other media:  only the actors playing a couple of minor characters agreed to do so.  As a result, the TV commercials included scenes of complex interplay between a variety of well-known character actors, while all the print and point-of-sale inexplicably revolved entirely around two rather lonely bit-part players – a teenage daughter, as I recall, and a distant aunt.)

But the question of endorsement is also a difficult one.  Many celebs are happy to appear in advertising, but not happy to invest their personal credibility in endorsing the product.

This stance often results in a good deal of hair-splitting.  Sometimes, for example, they will agree to endorse the product but only if they’re clearly playing a fictional character, not appearing as themselves.  And sometimes they will happily endorse the product in advertising that will not be shown in their home countries – anyone who saw the wonderful Lost In Translation knows how all sorts of huge stars who wouldn’t be seen dead in advertising in the US or Europe will enthusiastically sip Scotch, tap keyboards or even scrub sinktops in commercials appearing only in Japan.

Anyway.  There are two possible conclusions to be drawn from the Pru Health campaign:  either Lord Coe has less need for the money than Johnny and Jessica, and/or his agent is a tougher negotiator.  It’s interesting what you can learn from the presence or absence of a pair of quotation marks

It’s all about the walking-in-other-people’s-shoes thing, and not as in the famous joke.  (“Before you pick a fight with another person, make sure you’ve walked a mile in their shoes.  Then when the fight begins, you’re a mile away and you have their shoes.”)

The best mailshot I ever received, as you’ve heard me say a million times, was from an IFA wanting to advise my agency and me on employee benefits, a subject in which I as the agency’s creative director had no interest whatever.  Brilliantly, he hooked me in like a sitting duck (?) with his lead-in line, Do you ever wonder what other creative directors earn? – probably the only question in the universe both massively relevant to employee benefits and simultaneously massively relevant and engaging for me.

The current ad on the tube at Euston from the Quran Project stands at the far opposite end of the spectrum.  The headline tells you all you need to know about the advertiser’s intentions, admirably proposing Less Hating, More Educating.  But the way it tackles this laudable aim offers little hope of success.

The sub-head invites us to Discover the scientific truths in the Qu’ran, and the visual shows a booklet titled, unsurprisingly, Scientific Truths In The Qu’ran.  The non-believer feels pretty unsure about this,  For one relatively minor thing, we’re not used to spelling Quran like that:  the apostrophe momentarily throws us.  But “scientific truths,” in a book written a thousand years ago?  What do they have to do with anything?  And, more importantly, what could they possibly have to do with the things that worry us about Islam in general and the Quran in particular?  What we want to know is whether the Quran gives any encouragement to the rather wide range of Islamic practices that really disturb us:  we don’t much care if it also mentions in passing the pain-killing powers of the extract from a willow-tree or whatever.

It gets worse.  Alongside the picture of the booklet, there is a quote from the Quran (chapter 10, verse 37).  This says:  And it was not [possible] for this Qu’ran to be produced other than by God.  Leaving aside those odd square brackets, which do make you wonder what the original quote really says, this quote throws cold water all over any flickers of interest you may have been experiencing into the Quran’s scientific credibility.  Would anyone writing in a spirit of objective scientific enquiry flatly deny the possibility of any other authorship?  To a lot of us, the idea of any god actually “producing” a book is simply nonsensical.  I suppose we’re just about willing to engage in a discussion on the subject, but not with someone who refuses to contemplate any other possibility.

In short, for all its admirable intentions, the effect of this large and expensive ad is to confirm many of our worst fears about Islam and the Quran:  that they, and it, come from a world that is frighteningly different and remote from our own, and that there seems to be no possibility of engaging with them or it in any constructive way.

The strapline encourages us to respond in order to request a free copy of that booklet about the scientific basis of the Quran.  Any slight interest we might have in doing so quickly evaporates when we notice the words in the small print – postage and packing extra.  I doubt whether many non-believers will choose to pay for the privilege of reading it.