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Fog in financial products is deliberate – Bank official
[16 July 2016] A senior Bank of England official has suggested financial products are sometimes made more complex than necessary so a premium can be charged for them.
In a speech to bankers and politicians, Andy Haldane, the Bank’s chief economist, also said he didn’t understand pensions, an ignorance he felt was shared by many other financial experts:
‘Of course part of the reason so many members of the public find finance difficult is because it is difficult – and, sometimes at least, it is made deliberately so. There is plenty of evidence, including from the financial crisis, of financial products being made more complex than was necessary and consumers being charged a premium for buying them. This damaging cycle persists because of the difficulties consumers understandably face when trying to compare these products. To give a personal example, I consider myself moderately financially literate. Yet I confess to not being able to make the remotest sense of pensions. Conversations with countless experts and independent financial advisors have confirmed for me only one thing – that they have no clue either. That is a desperately poor basis for sound financial planning.’
The full speech is available by clicking here.