It seems appropriate, shortly after the launch of an ethical index, to add
a note of conservation to this piece.
Not that I particularly feel like a species under threat – quite the
contrary. It is just that there is so much that we have today but may not
Extinction has a lot to teach us. Barely a year passes without some pundit
or other proclaiming the end of the IFA forever, no future for commission,
world domination by bancassurance or a glorious new economy built on mobile
phones and dotcoms that will wipe out traditional business practices for
Next time you consider such an article, remember the “other” victim of
Mauritius – the red hen. Everyone knows how the hapless dodo was hunted and
killed by sailors until they noticed they just were not there any more.
The red hen had an even more cruel twist to its fate.
It was irresistibly drawn to anything red in colour – shirts, caps, and
bags, anything at all. Unfortunately for the red hen, all the sailors who
were responsible for its lack of longevity wore red. They would fly down
right next to the sailors where they would, unknowingly and innocently wait
to be transmogrified into a 17th Century poacher's pie.
The lesson? Well, if the red hen had kept its head down and ignored the
very people who represented the threat, it may have survived but it was
programmed to go to the very thing that destroyed it.
I think many people are like that. Some IFAs seem to spend hours
discussing their own demise. They blame the Government or the market or
even the FSA and jump up and down about this and that instead of making it
all work. Then there are others, perhaps less traditional, who take off
their reactionary rose-tinted spectacles and see opportunities.
Some Equitable Life clients seem particularly adept at whingeing about a
16 per cent fall in the value of their never-guaranteed terminal bonus.
They should try a pension fund in Henderson global technology over the last
18 months – Now that is a loss.
Last, and quite definitely least in every possible respect, are
journalists. As I am, for the time it takes to write this piece,
temporarily seconded to this noble profession, I must add that many escape
red hen syndrome. Others, however, relentlessly attack the meek and
Endowment policies, with-profits bonds, Isas, Sipps, Mips – all have had
their weak points liberally displayed and any small recompense of benefit
totally ignored. Has anyone wondered why, if with-profits endowments are so
bad, that the Tep market is so robust?
So, the red hens of financial services continue to flock to the next big
issue and one by one they complete a self-fulfilling prophecy of doom.
How many IFAs, life offices, investment banks, unit trust companies and
societies are on a similar downward trend? Is it inevitable that there will
be a point at which these once great institutions believe they have ceased
to be viable?
Change presents an opportunity to form new groups, new ideas and new
approaches. We all need to adapt to avoid being drawn in by the very thing
that will finish us off. We need to get the best out of the survivors and
break new ground with leadership, passion and belief.
So, just remember, next time you feel like becoming extinct, that none of
us is smarter than all of us.
Steve Buttercase is senior adviser at LM Financial