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Dented packages

No company offers all the features we want although some come close.

For a number of years we have been using a variety of fund supermarkets, wrap platforms, multi-fund managers and insurance companies to manage client investments but none gives us everything we want. Most are average or pretty poor.

The main features we like are a very wide fund choice, unlimited number of free or very low cost switches each year, totally flexible and unlimited remuneration, excellent administration, excellent system, online valuations, online switching, comprehensive plan information online, investment tools and specialist investment funds.

Some companies such as Skandia Life, Zurich Life/Sterling, Cofunds and Winterthur Life tick a number of the boxes. Some pure wrap providers such as Transact offer a poor service, in my experience. But no provider we are aware of offers all these features. If one of them did, I believe they would clean up.

The company that comes closest to achieving this at the moment is Skandia Life. It offers a very wide choice of funds, unlimited number of free switches for investment bonds and pensions and low-cost switches for collectives. Remuneration is flexible, less limited than most providers but not totally unlimited. Its in-house administration and systems are better than most.

My admin team tell me this is in no small part because Skandia Life has dedicated named members of staff who respond to queries quickly and efficiently and get things done. Its online switching and valuation system is excellent. Its wrap platform offers comprehensive client information online. It has very good investment tools and a number of specialist investment funds.

Overall, Skandia Life offers a powerful package which will be further enhanced by its takeover of Selestia which will strengthen its collectives proposition and widen its choice of funds. Significantly, it will then be able to offer IFAs enhanced fund-based renewal commission on collectives which, in my experience, is not generally available on the market.

This is a company with its finger firmly on the pulse. Skandia Life has always differentiated itself from other companies and refused to follow the crowd. It has concentrated mainly on the investment market but does have some other very useful products, for example, inheritance tax mitigation and protection plans.

An argument against using Skandia Life is that its fees are a little on the high side. We do not have a problem with that because we recommend regular (mainly free) fund switches to it which, in our opinion, more than compensates. Also, it does offer an excellent range of funds. In our experience, you get what you pay for and our clients accept that.

It never ceases to amaze me how many big companies do not offer the most simple common-sense service. Take telephone answering, for example. Why can’t companies supply enough staff to answer the phone after two rings? That is what our business does because we know that anything else would be infuriating to clients.

Providers have generally made their best staff redundant and replaced them with spotty teenagers who are clueless. They have not invested sufficiently well in technology and systems and have not trained their staff well, either.

Many try to be all things to all men rather than finding specialist areas to concentrate on. Admin is generally diabolical, with some companies having as much as six-week turn-round times to answer queries.

For many years, the big brand names have offered very poor investment funds which have left many policyholders much worse off than necessary. Even now there are insurance companies offering annual bonuses of 0 per cent on with-profits policies even though the stockmarket has almost recovered from its low point of March 2003.

These companies are shockingly bad but there are fortunately a few rays of hope like Skandia Life. Let’s hope more companies follow its lead and make our lives as IFAs easier. Here’s hoping.

Tony Byrne is financial planning director at Wealth And Tax Management.


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