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Independent view

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

have tomorrow.

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&#39s 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


Rough on the smoothing

I refer to the letter from Terrence O&#39Halloran, Who can beat the returnson with-profits? (Money Marketing, August 16). One of the problems with with-profits is determining what the returns havebeen. Surveys of maturity values on with-profits funds are often quoted butthese only cover a tiny fraction of the policies on the books and by nomeans […]

Clarke vow to review the scope of the FSA

Conservative leadership candidate Ken Clarke has vowed to review the scopeof the FSA within two years if he is elected leader, as part of the party&#39spolicy towards financial services. The former Chancellor has committed himself to splitting the roles ofchief executive and chairman following the term of Howard Davies andconducting a wider ranging review of […]

Small IFAs could face paying bill for review over Serps

Big IFAs are likely to opt out of the PIA&#39s proposed scheme forrecalculating phase two transfer cases under the pension review, leavingsmall firms to foot the bill. Companies such as RJ Temple are not affected by the PIA&#39s decision tore-open cases to calculate the Serps adjustment bec-ause they did littlepension business and they are unlikely […]

GISC waits for commission decision

The General Insurance Standards Council is hoping for a decision this weekfrom the Competition Commission appeal tribunal on whether it can implementrule F43 forcing GISC members to only do business with each other. If itgets the go-ahead, IFAs selling general insur-ance will have to beGISC-regulated even if they are already PIA-registered. The commissiondecided to investigate […]


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