How good are practitioners at presenting their views to regulators and the press?
Regulators, product providers, financial advisers, the press and consumers have an identical goal – consumer satisfaction. There have been many initiatives to establish what is wrong in our industry and what can be done to improve it but few have had practitioner input – even when it was sought – and consequently have often missed the point.
The regulators have often said that IFAs do not exactly inundate them with responses to consultation exercises. Indeed, I read very little – anywhere – of the great qualities in our industry. But, with N2 approaching fast, it really is not the time to do or say nothing.
We sometimes read comments from people outside the industry which do not tend to look constructively towards what the future shape of financial services should be. They tend to aim at existing products, services and business practice. This is when we all get hot under the collar as though it was our driving being criticised.
“How dare these non-industry people speak about us? How dare they suggest we can improve?” is the outcry.
The Financial Planning Certificate (or equivalent) is the minimum benchmark test of knowledge for financial advisers. It has to be coupled with continuous professional education and on-the-job training to enter and stay in the business. But there is a vast army of people without the FPC, or even without close experience of our job, telling us how to run our businesses. They are giving advice on the suitability of endowments, the benefits of Isa mortgages, tracker funds (not looking so clever at the moment) and whether to get out of or (less commonly) stay with Equitable Life. All opinion without responsibility.
How did they earn the right to comment or advise? They are writing articles and expressing their opinions but are not financial advisers.
But do the public discern a difference between advice and opinion? Are the public influenced by such comment? If not, why bother? Are journalists more informed about Equitable Life, for example, than regulators?
Every IFA sees superb yields from with-profits endowment policies. You need to be a practitioner to know it and to be enthusiastic about it. The alternative is to be cynical about good news and to bracket all products and performance together. It is surprising that companies have not made a better job of defending their results.
Financial advisers have been criticised for selling life cover to young people without dependents. Have they not heard of guaranteeing future insurability? Haven't we seen the effects of not doing so?
I have even seen criticism of young people with “safe income streams” being sold waiver of premium. What safe income streams? What garbage.
Maybe I take too much notice of ill-informed opinion. Footballers such as Alan Shearer, David Beckham and Dennis Bergkamp would be pretty annoyed if I, with my vast experience of amateur football, tried to convince them that they had got it all wrong. Let us speak up for what we do.
Sometimes, we will see well-informed opinion we cannot understand. For example, in the name of justice, the Law Lords made a decision on Equitable and, apart from those policyholders who were retiring immediately or dying (a dramatic method of obtaining what is due), or who had policies maturing, I am hard pushed to define who gained from that decision.
Recently, there was controversy over whether there should be payment of widows' pensions to non-widows. Personally, I think people should be taking the responsibility of buying adequate life insurance for themselves, especially where dependent children are concerned.
Should we be in the job of convincing people of their responsibilities or just leave brochures in the hope that someone, somewhere, thinks it is a good idea? As long as people think they are not going to be ill, die or become dependent on a daughter or son, persuasion will be a valid part of our role.
Is it not about time we stood up for our beliefs rather than let our silence be an indication that all criticism must be warranted? Couldn't we all do more to talk about best practice, rather than remain silent, which is of no benefit to our industry?
Len Warwick is managing director of Warwick Butchart Associates