In last few months of 2004, major battles - mainly behind-the-scenes - broke out between Personal Finance and some of the key players in the life assurance industry. In my first column of this year, I would like to give you an insight into Personal Finance's approach to reporting news and advice.
Some senior executives in the financial services industry believe they should be able to manipulate the media, and they go into a deep sulk when they cannot get their way.
The financial services industry employs hoards of spin doctors, some useless and some very good, to get people like me to write favourable articles about financial products and to ignore the warts.
The spin doctors employ various tactics to achieve their objectives, from showering us with media releases (often half-baked), to sweet-talking, sending unsolicited gifts and offering trips overseas (but this is only if you have been very compliant).
If we fail to take the "carrots", the spin doctors or their employers resort to the "stick", which include threats to withdraw advertising and blackening our name with false accusations. On the lighter side is the senior executive of a financial services company who boasts that he never reads Personal Finance. He sounds more like an ostrich than a senior executive!
Over the past few months, we have run just about every conceivable gauntlet, particularly after we published actuary Rob Rusconi's controversial report on the high costs of life assurance retirement annuities.
I find it absolutely amazing how even the good spin doctors (a number of whom I count as friends and respect) are blamed by their bosses when they cannot convince us to change our "wayward behaviour".
It seems many of the captains of the financial services industry think that the role of a spin doctor is to cover up the industry's problems and somehow get the media to go along with this. I have a message for these deluded executives: it is not going to work - at least not with Personal Finance.
The better spin doctors know that no institution or industry can get away forever with selling a faulty product. As the saying goes, "you can fool some of the people some of the time, but not all of the people all of the time".
It does not take a Rob Rusconi or Personal Finance for our readers to know that there are significant problems in the financial services industry. The many letters, telephone calls and emails we receive are evidence that a lot of consumers are angry.
People who have been at the receiving end of poor advice and/or bad products are not going to believe propaganda. Personal Finance would lose credibility and readers rapidly if we went along with any plans to paper over the cracks.
The financial services industry should realise that if it wants to win over you, the consumer, and appear credible, it should adopt the following strategy: admit to the problems; tell you how it is going to fix the problems; fix the problems; and tell you that the problems have been fixed. Everyone would benefit as a result. The industry would have more credibility and you would be more likely to purchase its products.
There is no doubt that it is in our best interests to buy financial products, particularly risk products - such as life and disability assurance - and savings and investment vehicles.
To attempt to shoot the messenger (the media) and to fire the good communication advisers, who give their employers sound advice, will only make the situation far worse.
FIX THE PROBLEMS
I believe the major life assurance companies will be getting together in 2005 to consider how to respond to the bad press the industry has received of late. Hopefully, their response will be based on rectifying the problems with their products and services.
Personal Finance staff are not allowed to accept gifts from financial services companies or from advertising or public relations companies acting on their behalf. If we are sent gifts, we store them and sell them at a staff auction at the end of the year. The money goes to a good cause, such as the Red Cross Children's Hospital in Cape Town.
We turn down trips - whether local or foreign - offered by companies. If we believe that an event is worth attending, we pay our own way.
We check every media release we receive in an attempt to ensure that it contains accurate information and that you will not be misled. We are not infallible, but we do our best to ensure that you receive truthful and useful information. Often it takes many weeks before we are satisfied that a report is ready for publication, with drafts being sent to and fro to ensure accuracy.
Personal Finance is now almost nine years old. It has been an interesting nine years. The financial services industry is changing rapidly. Some of the changes are being forced on it by the government as it tries to ensure that you receive better treatment. Some of the changes are a result of the move from defined benefit to defined contribution pension funds. Greater awareness among consumers of their rights has also contributed to the changes, and I think Personal Finance has played a role in this regard.
We intend to continue to make a constructive contribution to the financial services industry. Personal Finance will co-operate with any person, company or institution that makes the interests of the consumer its first priority.
We will also continue to batter what is wrong. Many of our critics are under the illusion that we do this because we are trying to drive up readership or profits. In fact, we often lose advertising as a result of our criticisms.
Personal Finance does not hesitate to criticise bad products and service because one of the main functions of the media is to keep you informed.