Viewpoint / Helping the blind
Maariv recently implemented cutbacks to save costs. Among other things, it reduced the number of stock market pages it publishes to save on paper. Now it only has two, presenting a smattering of trading data on the previous day.
The paper is very proud of its skillful cutbacks. Instead of firing people, it reduced its outlay on paper, without significantly bothering its readers. Sources at Maariv say that only a handful of readers complained about the move.
The report from Maariv reveals two things. One: it does not focus on economic matters, and the paucity of response is indicative of the composition of its readership. Two: Israel's readers don't care about economic matters. They basically ignore them.
Terms such as bonds and options are Greek to your average reader. People view stocks as a ride to Las Vegas. Even though they have holdings in mutual funds, they'd never open the stock pages to see what their investments are returning.
Yossi is lost
How can your average Yossi calculate his moves, when his bank clerk recommends he invest in a hideously complex structured deposit, or when he has to make a learned decision on the composition of his pension insurance - factoring in his income, his savings and his personal needs? We may assume that your average Yossi isn't calculating a thing, he's hopelessly lost, he's floundering about and willing to blindly follow any recommendation.
That is pitiful, and your average man and woman need all the help they can get to make economic decisions. Yet there's almost no help out there for them. Advisers at the banks have not been basing their recommendations on Yossi's good, but on their own. Just look how keenly the banks market their own provident and mutual funds, instead of advising the customer which funds really are the best for his needs.
Insurance agents persuaded people to change their policies just in order to collect as much commission as they could. For years they sold policies whose costs component was 10 times any economically justifiable amount. They didn't help, they maliciously caused damage.
Yossi has nobody to go to. Everywhere he goes, the advice he gets is biased. For years he became mired in bad investments because of this advice. If there is one area in Israel screaming for drastic change, it's that - financial advice, in order to restore the public's faith in the capital market.
And that is the true revolution of the Bachar reform. If the Bachar team's recommendations are implemented in full, there is a chance that for the first time in their history, the banks will become true objective advisers, uninfluenced by the bank's own profit. For the first time at least some of the insurance agents will become advisers, and for the first time insurance buyers can receive help with one of the more complex financial issues in the world - pension coverage. Forcing the banks to sell their provident and mutual funds isn't the true message of the Bachar reform: the true message is the institutionalization of financial advice in Israel. And that is worth every effort imaginable.
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