EXCLUSIVE: Financial customers lose faith in FSA

Only 17% of financial services consumers are confident that the Financial Services Authority is effectively regulating the industry, the latest poll from YouGov reveals.

The figure stands in stark contrast to the FSA’s own research published in July 2008 which found that 67% of the population who were aware of the FSA were confident that it was effectively regulating the financial services industry.

A cross-section of 3,929 consumers of the leading financial services brands in the UK were interviewed by YouGov, and were also asked their thoughts on the takeover of HBOS by Lloyds TSB.

Most people surveyed gave the thumbs down to the merger and think it will be a bad thing for consumers in the long run.

The takeover has raised serious questions about UK competition policy and whether the creation of a super-bank is in the best of interest of consumers.

Some 45% of those questioned feel the takeover would be a bad thing for consumers, compared with 25% who think it would be a good thing, a further 20% were indifferent and 9% were not sure.

Customers of the merged bank were themselves in agreement, with 45% saying it would be a bad thing, 19% indifferent, and 8% not knowing.

While 55% of Scottish financial services consumers thought it would be a bad thing.

When asked what impact the takeover would have on confidence in the UK financial system, consumers were fairly lukewarm.

On a scale of one-10, where 10 equates to boosting confidence a great deal, 43% give a score less than six with the average score being 5.6.

While six in 10, 62% are not confident that the actions taken would resolve the current crisis.

Steve Nuttall, head of YouGov’s financial services consulting, says: “While restoring the market confidence is of paramount priority, the global financial crisis has severely dented consumer confidence at a time when confidence in the financial system was already fragile following the failure of Northern Rock.

“Government, regulators and banks face a significant uphill struggle to restore consumer confidence: the takeover of HBOS by Lloyds TSB is clearly not sufficient in its own right to achieve this.”