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Time to start putting clients first again

Simon Nixon

Wednesday, 11th June 2008

Simon Nixon says trust in the City is at rock-bottom but he sees a glimmer of hope in the rise of boutique banks

But the biggest pressure for change is likely to come from those who have borne the brunt of the changes in the City: the customers. During the last 20 years, investment bank clients — institutions and companies — could not do much about the downgrading of relationship banking. But now the banks are in disarray, there is a chance to redress the balance. When the dust settles, clients will remember who stuck by them and who did not. They will remember who provided sound, genuinely independent advice and who simply acted as glorified salesmen. After a period when trust has so comprehensively broken down, banks will have their work cut out to rebuild it. Sticking to the methods that created this mess will not be an option.

That offers a glimmer of hope for those that think the City lost something important during the upheavals of the last 20 years, or believe it was the shift towards giant universal banks that got us into this mess in the first place. The answer is likely to include smaller, more focused banks that are more pleasant places to work, have fewer conflicts and unambiguously put their clients first. The Bradford & Bingley episode may mark a new low for the City. But it may also prove to be one from which the only way is up.

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