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Community spirit

Having just set up a lunch at my house, I used Facebook to invite my friends. Online communities are becoming very popular and cannot be ignored.

But where is the online financial services community? What is the major online invitee-only site that IFAs use to ask questions of other IFAs about products, companies, service and whatever else they want to talk about? I would be surprised if you know. Isn’t it time that we set up many online communities for financial services?

Next to my profile on Facebook is a loan calculator. It is easy to pop in a few numbers to see the outcome and is far more attractive to those who prefer to sit in front of their computer rather than make an appointment with the bank.

We have for years been a nation of borrowers, not savers. Seeking mortgage advice is one of the major reasons why consumers seek a financial adviser.

According to, which has a search for an IFA facility, 33 per cent of consumers tick the box saying they want to receive financial advice about retirement planning, 24 per cent for investment and savings and 23 per cent for mortgages.

The spring savings survey commissioned by National Savings & Investments says over half the population have not made any financial plans for the future, with many believing it will always be possible to borrow money as needed.

This demand for mortgage and loan advice is reflected in the latest lending figures which show that mortgage lending hit £34.2bn in June.

But how much is the UK earning to be able to afford to pay back this colossal amount of borrowed money? According to the Office for National Statistics, the fifth of the UK population with the highest incomes earned an average of £68,700 in 2005/06 while the fifth with the lowest incomes earned only £4,230.

The announcement by Standard Life that it is considering creating its own national financial advisory firm to attract consumers overlooked by the majority of financial advisers needs to be considered alongside the reality of the statistics outlined above.

Standard Life says its distribution arm will be targeted at clients with £50,000 to £100,000 to invest and will have the regulatory status in a post-RDR world at the top of the general financial adviser category or bottom of the professional financial planner category.

It could be argued that individuals with this amount of money to invest are the clients of the pre-RDR general IFA. Does this not put Standard Life – one of the life companies most respected by IFAs – in direct competition with the majority of IFAs?

There is much discussion over the implications of the RDR and what it will deliver, particularly concerning the issue of paving a way for the banks to unleash their brand loyalty on the mass public with expensive, non-price-capped “simple” products. However, we should not take our eyes off the Association of British Insurers members which wants to move from product manufacturer to distributor.

Factory gate pricing will be interesting for those who manufacturer then sell their own products. Let us not forget the lessons learnt from Equitable Life.

Kim North (kim@techand is director of Technology and Technical


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