View more on these topics

Fee model is out of this world

I refer to Robert Reid’s article (Money Marketing, August 17). As you expect from Robert. he gave a clear and frank view on the threat that churning and persistency has on our industry.

He cleverly compared this with some of the current crop of reality TV shows. At Scottish Life we have let our IFA audience vote and they have virtually evicted initial commission from the house in favour of a clearer, more transparent model. So if the industry is looking to solve its problem, maybe it should have a look our financial adviser’s fee model.

It made me think of another comparison, the recent BBC hit Life on Mars inspired by the words of the David Bowie song.

It’s on the industry’s tortured brow

That Stakeholder

has grown up a sow

Now the big boys

have struck for fame

‘Cause churning is on sale again

See the mice and their blind boards

Shouting because they’ve sold loads

Common sense is out of bounds

To the unimaginative, the archaic, and clowns

But commission is a saddening whore

For someone’s paid it10 times or more

It’s about to be writ again

As I ask you to focus on

Providers fighting for fool’s gold

Oh man!

Look at those cavemen go

It’s the freakiest show

Take a look at the big brand

paying for market share

Oh man! Wonder if they’ll ever know

Why they’re in the best selling show

Is there life on Mars?

I think you get the idea. IFAs and their clients are not from Mars. Up-front commission is the mainstay of the advisers’ diet and their clients prefer to pay for advice in that manner.

It is up to the product providers to look beyond the obvious and provide a solution that meets customer needs and makes commercial sense.

The success of our financial adviser’s fee model demonstrates that a simple solution is closer to home than Mars

Andrew Taylor
Scottish Life, Edinburgh

Recommended

Stubborn Asp is baffling advisers

The Asp mess continues to get messier. IFAs can do the bidding of the Treasury and avoid being called nasty tax-avoidance advisers by not recommending Asps.

Nationwide’s pledge on merger job losses

Nationwide has pledged to keep compulsory redundancies as low as possible following the announcement of its planned merger with Portman. The two building societies have admitted that the current combined workforce of over 18,500 staff will have to be trimmed when the amalgamation is complete in September 2007 but the exact numbers are still to […]

FSA completes network probe but won’t name mystery four

The FSA’s investigation into the four mortgage networks that voluntarily agreed not to take on any new appointed representatives has closed but the identity of the quartet remains a mystery. The regulator says its probe is complete but is tight-lipped on whether any of the four are now able to recruit or whether any action […]

Put focus on value rather than costs

Increase in state pension ageRather than one specific state pension age, we would prefer to see a flexible decade of retirement, during which benefits can be taken or can be delayed.The basic state pension will be increased in line with average earnings as opposed to prices, probably from 2012This is to be welcomed although the […]

Scheme pays explained

By Fiona Hanrahan, senior product insight and technical support analyst We’ve received lots of queries on scheme pays and when it can be used. This article explains how it works and the conditions which apply. What is ‘scheme pays’? If an individual exceeds the annual allowance (AA) and an AA tax charge is due, they […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com