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Last week, most private investors would not have heard of Daniel Godfrey. This week, he has been reborn as a consumer champion.

If you are still scratching your head, thinking “who?”, allow me to explain.

Until Wednesday, Mr Godfrey was the head of a trade body — the Investment Association — presiding over more than 200 corporate members including all of the big fund managers, with a staggering £5.5tn under their collective management. Well, he was, until they forced him out.

Mr Godfrey’s mistake? In short, standing up for the little guy and campaigning for greater transparency on fees and charges. This, his detractors said, was not how a trade body should function. Oh no. The head of a trade body should uphold the self-interested agenda of all the members of the club, not hound them to reveal more information to customers than regulators have deemed necessary. Two of the IA’s most influential members — Schroders and M&G — threatened to leave, and thus claimed their scalp.

Some quarters of the fund management industry may be feeling pretty smug that Mr Godfrey has gone, but I think they will come to look back on this sorry episode as a public relations disaster. Why? To make my point, I’m going to take you on a little diversion involving 1) millennials and their tech habits, 2) people spitting out their tea, and 3) tins of tuna. So bear with me.

Lots of our readers are obsessed with fintech — the buzzword for new financial technology companies — both as an investment proposition and as customers. These new companies use digital services to cut costs and improve efficiency. I chaired a fringe meeting at the Conservative party Conference in Manchester this week with a group of them. The event was entitled Financial Fairness, which pretty much sums up how they intend to win custom from the incumbents.

One of these digital disrupters was TransferWise, the international money transfer service that claims to be “the cheapest way of transferring money globally”. Its biggest marketing ruse? Transparency. You’ve probably seen its adverts, emblazoned with Britons spitting out their tea when they discover their bank’s hidden charges. One ad that was nearly banned spells out “F¥€K — Your bank is overcharging you.”

Eye-catching, yes. But this is a powerful message for consumers, who are sick of being ripped off in one mis-selling scandal after another. Estonian co-founder Taavet Hinrikus (who started the company after he became irate at paying high charges) says it now processes £500m a month and has grown fourfold this year.

“Banks have focused on building services for themselves, rather than the consumer,” he told me. “When banks think about their pricing, it’s really about how high can we put the price and still get away with it.” And he’s not just winning customers — this week, the FT revealed that Vikram Pandit, former chief executive of Citigroup, has become its latest high-profile investor.

Investors in fintech companies might be old and rich, but this is in contrast to the consumer group that’s driving their investment decisions — millennials.

Today’s twenty-somethings have little respect for established brands they deem untrustworthy. Eileen Burbidge, who is not only a fintech investor but also a special envoy to the Treasury on the subject, argues that today’s young people “trust Apple before any of the retail banking brands, and would rather have their money go through Facebook than a bank”.

She believes that social messaging apps will in time command enough currency as brands to move into financial services — ably demonstrated by the success of ApplePay — noting that millennials value brands which are “trustworthy and recommended to them by their friends” over those which have been around for decades. Platforms like Trustpilot — where consumers share their views on big corporations — are also gaining currency.

The disruptive power of fintech prompted McKinsey to issue a warning note last week, saying global bank profits will be hammered over the next decade as banks are forced to cut their charges to compete with nimbler and cheaper tech competitors. (If you’re thinking about participating in the great Lloyds Bank share bonanza, this is something to ponder, especially if you plan on holding those shares after the one-year bonus has been paid).

The banks are responding to this threat by teaming up with and even financing the development of small tech companies, pouring billions into developing digital services for tomorrow’s consumer.

By contrast, the fund management industry seems blissfully unaware of the motion in the millennial ocean. One of the acts for which Mr Godfrey was most derided was asking members to sign up to a “statement of principles”, promising they would put clients’ interests first, and accept tougher standards of cost disclosure than regulators currently require. But only 25 members — less than one-eighth of its membership — were willing to sign up.

In the wake of Godfrey-gate, that list — which includes Legal & General, Axa and Newton Asset Management among others — should deliver the most enormous free marketing boost for these companies as consumers search for greater transparency.

By pressing the industry to move faster on cost disclosure than it wanted to, Mr Godfrey was way ahead of his time. The reaction of FT Money readers to his ousting says it better than I can.

“What smells so bad is that not a single fund group member of the IA has spoken out on the record to defend their lack of zeal of expediting complete clarity of funds’ fees, transaction costs and performance,” one reader emailed me to say. “Are they all ashamed of having to admit they put their interests before those of consumer investors who entrust their savings to them?”

Other readers hit out against what they perceive as the “cosy world of asset and wealth managers” which Mr Godfrey’s reform agenda had threatened. “They thought he was acting more like a regulator. Sounds like they need one,” another reader commented. Another was more cutting: “The Investment Association is now officially the equivalent of a trade lobby group for second-hand car dealers.” Ouch.

This all goes to show that by appearing aloof, uncaring and out of touch with its customers, the fund management industry is in danger of tainting its own brand. And why should it care about not losing the trust of consumers? I respectfully refer the next permanent head of the IA — whoever that may be — to the recent movement in Volkswagen’s share price and this week’s revelation that John West came bottom of a Greenpeace league table for sustainably sourced tuna, despite marketing promises to the contrary.

Financial consumers are savvier than most. If we don’t trust you, we can vote with our feet — and in this increasingly digital world, with our fingertips.

Claer Barrett is the editor of FT Money. claer.barrett@ft.com; Twitter: @Claerb

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