The COVID-19 crisis provides the financial services sector with an opportunity to respond to the needs of consumers, as well as help them stay safe from scams, according to Baroness Morgan of Cotes.

Speaking at PIMFA’s inaugural Virtual Fest yesterday (3 June), the former Culture Secretary told delegates that looking after customers “is going to be really important” and that customers would “remember how well they were looked after during this period.”

Comparing the coronavirus crisis to that of the financial crisis a decade ago, Baroness Morgan suggested there was a sense early on in the pandemic that among the public, the mood was “we helped the banks ten years ago, now it’s their turn to help us”.

Baroness Morgan stated that the industry had worked well with regulators and the Treasury to quickly raise concerns, as well as engage in dialogue resulting in measures such as mortgage payment holidays, to help those in financial difficulty as a result of coronavirus.

However, she also cautioned: “For some, what has happened will have come as a shock. What we don’t know is what will happen to household spending and household debt. FCA action on payment holidays was right but it was only a problem delayed.”

The former chair of the Treasury Select Committee also suggested there would soon be a Parliamentary debate about how best to protect consumers from unregulated companies advertising on online platforms. She said protecting consumers had to be balanced with making sure people were better educated about potential scams.

“The only way to keep the [FSCS] levy on an even keel is to prevent scams and by reducing the number of victims in the first place,” she said. “Making sure people are educated about scams will be a big part of this and the more that people become responsible for their own pensions, the more that will happen.”

PIMFA chief executive, Liz Field, commented: “Renewed vigour to help protect consumers from scams, and ensure they get the right information will be a vital piece of work for wealth managers and financial advisers in the months to come.

“It’s clear from the evidence we have seen today that anyone can be a victim of a scam. There are clearly a large number of vulnerable households and the COVID-19 has exacerbated what was an already serious problem.

“Wealth managers and financial advisers will play their part in helping to reduce the financial attacks on consumers but they cannot do it alone. This needs a wider approach from industry, policymakers, charities and the regulator.”

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