After some 30 years in the insurance industry, I have now put away my pen and have ceased advising clients on their insurance problems and needs.
Despite this, it is apparent that I can still be held to task and need to provide substantial reasons for what, say, 15 years ago, would have been deemed sound advice.
Over half of my professional life I have sought to establish goodwill in a business sector that has used such terms as “unitised with-profits”, which we were persuaded consolidated all gains made so that they could not be reduced once added – and yet they still went down.
We have had to stand by and see CEOs of what we believed were solid and reliable financial institutions depleting, at a cost to our reputations, the savings of our clients while a few of them paid themselves bonuses in one year that some of our clients (and their customers) could not have earned in a lifetime.
Because we were assured by those fine gentlemen who represent the pillars of our financial institutions that by incorporating a mix of gilts, bonds, deposits and equities in their products, our clients' savings would both be secure and would grow, we recommended them accordingly. How is it they still went down? And even more so, how is it that we should be accountable?
Essentially, brokers and IFAs were able to choose from a range of “reputable” companies that offered us a selection of benefits we felt were suitable for the circumstances of our clients. We, in good faith, made recommendations to buy products which, when confronted with a turndown in the economy, proved the promises of these esteemed institutions false. They have, like sheep, fallen into the same black hole.
Brokers and IFAs are being called to account for assuming that the life insurance industry held the maxim of utmost good faith sacrosanct but apparently they now wish to dump their responsibilities exclusively on to us. How many financial journalists, for example, even including those with IFA qualifications, would have questioned the projections of such offices as Equitable, Britannic, Standard Life or Norwich Union? (One such journalist put his own pension fund into Equitable.)
Now I have a personal quandary. Faced with a vacillating stockmarket, annuity rates that look so sick that one wonders if they will ever recover and an industry that cannot quote what I ask for because its staff appear totally untrained, I am desperately trying to find some of that good faith that I have endeavoured to encourage my clients to believe in over the years. Who shall I hold to account for following my own advice that was based on the promises of these financial giants with what now seem to be feet of clay?
Spencer Pashley Partnership,