Former consultant and General Manager: – I am ashamed of the industry min – Aftenposten

• Banks assisting wealthy clients hide money in tax havens.
• fund firms that sell passively managed funds, but require fees as if it were active funds.
• Local savings banks selling complex savings as individual advisors either do not understand or should know not to customer best.

This is the most serious of the many examples of relatively fresh violations of banking and finance as Rune Brunborg highlights.

Brunborg’s former chief of savings in Skandiabanken, consultant and financial adviser. He believes there should be far greater consequences of conducting unethical in the financial services industry.

– To get into the news a few days is not enough

– I’m embarrassed parts of the industry min. There are too many people and companies who do not take society its mission seriously. Still there are nooks and crannies that can not withstand the light of day, he said.

Lawyers, brokers and consultants eats up more and more of the economy – Time to streamline anyone other than teachers and nurses

– When the most serious consequence is that come in the newspaper a few days in a row, is not enough. Whether it was related to heavy fines overtrampene, it would have begun to mean more for owners and managers. They’d probably ensured that it propagated further down in the system, said Brunborg.

Low interest rates can send their savings to the mattress

Do bubble must burst

Brunborg think little has changed in the industry in spite of the great junkyard in the late 2000s. New rules came into force after the scandals related to both the financial crisis and the sale of so-called structured products.

But it’s still too easy to exploit gray areas, think Brunborg, who is supported by ethics expert and professor at the Norwegian School of Economics (NHH ), Knut Ims.

– Professional ethics is important in any industry. It is part aspects of the financial sector makes it particularly vulnerable to abuses, says Professor Ims.

He points out that banking of old have been protected from disclosure and that secrecy has been an unwritten rule. The financial sector has a lot of power, since it handles all our money.

– Salary nobility in Norway we find the financial industry, and many will not disclose what they make money. The world of finance is quite closed, and too few have insight into what goes on there. The bubble we need to crack, says Knut Ims.

– arrows pointing in the right direction

Earlier Your Money editor Tom Staavi, who is now Director of Finance Norway, disagree that there are still parts of the industry that can not withstand the light of day.

– We can hardly avoid making mistakes in perpetuity, but the arrows are pointed in the right direction for many years. After the financial crisis we received a tsunami of new rules and regulations, and I think the financial industry has made a quantum leap in terms of combating economic crime and undesirable products in the industry, says Staavi.

He says there will always be a tension between demands for value creation on the one hand, and ethical guidelines on the other.

– Whether there should have been stricter consequences of violations than today, we can certainly discuss. It is always possible to make mistakes. But in savings we see a completely different transparency and significantly tighter regulation of counseling than ten years ago, both from the government side, but also through internal and self-imposed rules, says Staavi.

He notes that mispricing of a product not necessarily violate ethical guidelines.

– the cost to use the best analysts, but they can still be wrong. Nobody knows what the future will be. In retrospect, a fund product perceived as overpriced, but the important thing is that customers know what risks they take, he said.

Against Norwegian adherence to EU financial supervisory Dublin, Paris and Frankfurt will steal London’s financial industry

Is sellers, not advisors

Rune Brunborg says that he has seen a lot of what he calls uncultured in his career, and it can often be difficult to draw the line between what is illegal, unethical and smoothly.

– as a consultant I analyzed such as the distribution of costs in the insurance industry. The result was that the insurance company could leave some policyholders pay more and others less. Life insurance, which is difficult for customers to move, thus got a higher premium so that other products could be on offer. It is not illegal, but poorly done. I have had some bad in retrospect to have contributed to such a process, said Brunborg.

He believes both banking and insurance often takes deliberate higher prices and interest of customers, and betting that they do not notice it.

– When the customer wants to move, calling you up with a “rescue team” that suddenly can offer better terms anyway. It is problematic because customers trust the counselor’s, and if it should be like that, they must rather call it sales, said Brunborg.

– Not only the price determines

Staavi in ​​Finance Norway says he does not recognize this description.

– for example, in the loan market competition is fierce. It is easy to compare offers from both the banks and the insurance industry. Finansportalen is a good place to start. But simultaneously determines not only the price but also the proximity and monitoring what customers choose, he said.

small depositors have lost faith in the fund market

– Ethics Posters for the sake

One of the measures to improve ethics in the industry was the authorization scheme for financial advisers, which is an industry standard for them to advise customers about personal finance.

– of course it is not enough alone. Here one must have many instruments that pull in the same direction, and the potential for improvement in the industry is huge. The most important thing is to have good role models at the top of the organization, and that leaders do is more important than what they say. Most have ethics posters, but it is in many cases only for appearance’s sake, says Knut Ims Administration.

He points out that even those who are taken for serious corruption, as several leaders of the US energy company Enron, often referred to comprehensive ethics posters and guidelines, but apparently without effect.

He believes that personal responsibility is important, and that both companies and employees should be fined when the ethical guidelines are violated.

– I have had students who have found jobs in the bank, but to come back and want to study more, because they felt they were pressured to sell products they were not comfortable with, says Professor Ims.

Real estate agents paid DNB advisors NOK 1,000 for each customer they tip about Money from safari tourists in Africa go to tax havens in the Caribbean

– Transparency is the most important instrument

– All professions consist of people who partly painter’s own cake and partly painter corporate cake, while they say that they put the users or customers first. This applies not only in finance, but everything from doctors and psychologists to lawyers and priests. The only difference is that in the financial industry, it’s so direct about money, while for others it is more a side effect, says Jan Ketil Arnulf, a professor of management and organization at BI.

He notes that there is Unlike the “forbidden” and “unfortunate.”

– to create more and stricter rules will not always be able to solve problems but creates instead just more bureaucracy, says Arnulf, comparing it with an “arms race” – when the authorities forbid one thing, you will find industry new loopholes.

– It is often so that the laws are made by those who are in the industry, and they can usually more than those who will investigate the cases, says he said.

he notes that leaders always have to be accountable for what happens in business – even though they did not know what certain employees did – and believe openness is the only way to prevent more scandals in the future.

– Transparency is one of the most important instruments to ensure the quality in a profession, and when even traditionally secrecy about society that Switzerland now become more open about banking transactions is a step in the right direction, he said.

The full opening for funds causes concern Chronicle: Panama Papers – an expected scandal | Beate Sjåfjell Monetary Fund takes self-criticism about the financial crisis: We were too optimistic Billion Smell of DNB by tax havens revelations