No Small Change

CHAPTER 3From ‘Best Advice’ to ‘Satisficing’

Since this book calls for more of something called ‘good’ marketing, and less of something called ‘bad’ marketing, we're obliged to say something about what these terms mean – and, particularly, about how they apply to financial services.

We stand behind our big-picture conviction that in a consumer society, marketing – that's to say, identifying and satisfying consumer needs – is fundamentally a ‘good’ activity. And we strongly support the maintenance of a strict robust regulatory regime that, as far as possible, prevents ‘bad’ marketing and punishes and penalises those responsible for anything that slips through the net.

But many people argue that for one reason or another, marketing is different in financial services – that there are special considerations, specific problems and challenges, that apply. We want to examine these alleged differences between marketing in financial services and in other sectors. What are they? Do they stand up to scrutiny? And do they make a real difference?

There are four that are highlighted most often, and, simply put, we don't really buy any of them:

1. It's often said that there is an ‘information asymmetry’ between financial services providers and their customers – or, to put this clumsy expression into plain English, that consumers understand a great deal less about financial services that the companies providing them. This is certainly very often true, but it isn't at all unusual. People understand ...