Where to go when you don't trust your bank manager

Advice for SMEs.

Whether that business is large, small or part of the squeezed middle, there is little doubt that the fight to find and keep customers - and indeed to make money from them - is harder than it has been for a long time. One area where this is very evident is in the continuing struggle to access funds. Many owners of small and medium-sized businesses are still finding it difficult to get the funding they need from their bank.

The banks counter this criticism with a valid argument that the demand simply isn’t there and many would-be borrowers simply don’t want to take on more risk at a time of great uncertainty. Nevertheless, figures reporting the number of loan applications turned down suggest that the banks are still busy taking risk off their balance sheets and as a result are either refusing to lend at all or setting very high prices on their lending.

While it is clear that the banks are in a difficult position — castigated for being both too reckless and now for being too conservative — there are some very serious long-term implications from the apparent breakdown in relations between small business owners and the banks.

It wasn’t all that long ago when bank managers were the most valued and trusted advisors for those running small businesses. 

But as a recent survey (organised by Hitachi Capital Invoice Finance, which admittedly competes directly against banks to provide an alternative means of finance) shows, trust in bank managers is currently low. Only 21 per cent of SME owners questioned said they would trust advice from their bank manager. While it’s easy to dismiss the report’s findings as a PR exercise, they tally with other polls measuring the general public’s opinion of bankers (notably the Edelman’s Trust Barometer).

Put a group of business owners together in a room to talk about finance and it won’t be long before one or more bemoans the loss of personal banking relationships and the switch to centralised, call-centre style customer service. The days of a local branch manager having a close relationship with local businesses and being able to make appropriate lending decisions (possibly over a round of golf or a G&T) are gone. For some the more strategic overview of a regional risk committee makes more sense in the modern age. But while we all welcome that added professionalism, it’s difficult not to feel that something has been lost in translation. Many business owners would welcome a move back to a more responsive and locally aware banking system.

If business has lost trust in banks, what about other advisors? In his inaugural address in June ICAEW president Mark Spofforth made it clear that rebuilding trust in the accountancy profession was a major objective for his year in office.

“It worries me deeply that the profession I joined isn’t held in the same esteem that it was when I started out as a trainee”, he said, before adding that these concerns are shared by other qualified professionals.

On the evidence of this survey, things are already improving. Hitachi found that 43 per cent of respondents trust the advice they were given by accountants, a far higher score than for any other type of advisor. This is excellent news for a profession that has experienced considerable self-doubt in the wake of the financial crisis.

There is a long way to go, but the importance of such a key customer group being happy with the advice they get from accountants is underlined by further research from the technology company Portal. This piece of research was into the importance consumers place on service. It found that 52 per cent reported they would change supplier as a result of poor service. See a name and shame graphic listing some of the worst offenders.

If trust in the accountancy profession is to be built, then chartered accountants in firms of all size and shape will have to continue to provide excellent standards of service and to provide insightful and meaningful advice, especially to business clients. As Spofforth rightly pointed out in his inauguration address: “Trust has to be earned – and once lost it can take years to rebuild. It is fundamental to a well-run economy and to a properly functioning society. And it is a concern, a worry that only we as a profession can address.

"We need to show that we deserve people’s trust and we need to work hard to earn it.”

This article first appeared in economia.

Photograph: Getty Images

Richard Cree is the Editor of Economia.

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The Women's March against Trump matters – but only if we keep fighting

We won’t win the battle for progressive ideas if we don’t battle in the first place.

Arron Banks, UKIP-funder, Brexit cheerleader and Gibraltar-based insurance salesman, took time out from Trump's inauguration to tweet me about my role in tomorrow's Women’s March Conservative values are in the ascendancy worldwide. Thankfully your values are finished. . . good”.

Just what about the idea of women and men marching for human rights causes such ill will? The sense it is somehow cheeky to say we will champion equality whoever is in office in America or around the world. After all, if progressives like me have lost the battle of ideas, what difference does it make whether we are marching, holding meetings or just moaning on the internet?

The only anti-democratic perspective is to argue that when someone has lost the argument they have to stop making one. When political parties lose elections they reflect, they listen, they learn but if they stand for something, they don’t disband. The same is true, now, for the broader context. We should not dismiss the necessity to learn, to listen, to reflect on the rise of Trump – or indeed reflect on the rise of the right in the UK  but reject the idea that we have to take a vow of silence if we want to win power again.

To march is not to ignore the challenges progressives face. It is to start to ask what are we prepared to do about it.

Historically, conservatives have had no such qualms about regrouping and remaining steadfast in the confidence they have something worth saying. In contrast, the left has always been good at absolving itself of the need to renew.

We spend our time seeking the perfect candidates, the perfect policy, the perfect campaign, as a precondition for action. It justifies doing nothing except sitting on the sidelines bemoaning the state of society.

We also seem to think that changing the world should be easier than reality suggests. The backlash we are now seeing against progressive policies was inevitable once we appeared to take these gains for granted and became arrogant and exclusive about the inevitability of our worldview. Our values demand the rebalancing of power, whether economic, social or cultural, and that means challenging those who currently have it. We may believe that a more equal world is one in which more will thrive, but that doesn’t mean those with entrenched privilege will give up their favoured status without a fight or that the public should express perpetual gratitude for our efforts via the ballot box either.  

Amongst the conferences, tweets and general rumblings there seem three schools of thought about what to do next. The first is Marxist  as in Groucho revisionism: to rise again we must water down our principles to accommodate where we believe the centre ground of politics to now be. Tone down our ideals in the hope that by such acquiescence we can eventually win back public support for our brand – if not our purpose. The very essence of a hollow victory.

The second is to stick to our guns and stick our heads in the sand, believing that eventually, when World War Three breaks out, the public will come grovelling back to us. To luxuriate in an unwillingness to see we are losing not just elected offices but the fight for our shared future.

But what if there really was a third way? It's not going to be easy, and it requires more than a hashtag or funny t-shirt. It’s about picking ourselves up, dusting ourselves down and starting to renew our call to arms in a way that makes sense for the modern world.

For the avoidance of doubt, if we march tomorrow and then go home satisfied we have made our point then we may as well not have marched at all. But if we march and continue to organise out of the networks we make, well, then that’s worth a Saturday in the cold. After all, we won’t win the battle of ideas, if we don’t battle.

We do have to change the way we work. We do have to have the courage not to live in our echo chambers alone. To go with respect and humility to debate and discuss the future of our communities and of our country.

And we have to come together to show there is a willingness not to ask a few brave souls to do that on their own. Not just at election times, but every day and in every corner of Britain, no matter how difficult it may feel.

Saturday is one part of that process of finding others willing not just to walk a mile with a placard, but to put in the hard yards to win the argument again for progressive values and vision. Maybe no one will show up. Maybe not many will keep going. But whilst there are folk with faith in each other, and in that alternative future, they’ll find a friend in me ready to work with them and will them on  and then Mr Banks really should be worried.