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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


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