What’s in a name? Recently, it seems that names have a habit of accurately describing those who possess them. There has been the amusingly named Madoff (pronounced “made off” as in with everyone’s cash) and our dearly beloved banking legend Mr Goodwin who has enough annual pension to buy a holiday for 350 pensioners getting 0.1 per cent from their savings in his former excuse for a bank.
It seems that names can be timely, appropriate and perhaps even prophetic. My favourite is the brokerage, now gone, called MT Investments. Oh dear.
I have a serious point to make and it concerns the longer-term restructuring of financial services after this depression ends (oh, you didn’t think it was a depression? It is, trust me) and the rebuilding of trust and confidence. But panic not, this will not apply to IFAs, at least not to most of them.
You see, the IFA-to-client relationship is so unique, so personal and so resilient that most clients will weather the storm with us and be grateful for our support in these dark times. That is how a relationship business works. At least, it used to. The most valued part of our business will be what we have done through the downturn. That is how IFAs will be judged. As IFAs, our reputation is personal and it is all we have.
What many bigger IFA businesses do not do is nurture that personal aspect of the relationship, focusing instead on white-labelled products, higher commission deals and even single ties in some cases, as if clients were just desperate to have lost 35 per cent in a wrap rather than in an ordinary investment fund.
The plan is always the same – get a battalion of advisers using the same software, same products, same procedures and stifle any hint of individuality. Crank up the renewals, create value, then flog the lot and join the others in the Caribbean.
Remember the estate agency boom of the 1980s when Prudential (and others) bought up individually run agencies all over the country for a small fortune and changed all the names to their own? Slowly, they realised that these businesses were autonomous local success stories and mixing them up was like expecting peaches to go with pesto.
I remember Central London agent Chesterton refusing to wear the Prudential tie and quickly changing its name back to Chesterton only months after the sale. It convinced the board that its name was stronger in London and that it was losing business under the new title. It transpired that it was right.
Slowly, the whole project unravelled, with many businesses bought back. But hey, what’s in a name?
Steve Buttercase is senior adviser at m2 financial