In January 1962, I entered Commercial Union's head office to begin a career in financial services. Forty years later, I look back on five decades of change and challenge.
1960s. Started in the claims department, witnessing that – for pennies – families and businesses can be held together, children educated, mortgages paid, retirement income provided and jobs safeguarded in spite of death or illness. What a special business.
Remember this simple truth? Many knowledgeable colleagues shared such good lessons.
Moved to underwriting. Thought I had left Latin behind until told about caveat emptor (in the 1990s, caveat vendor became more appropriate). Own-case agencies and part-time agents were regrettably common.
Continued with Brunsviga calculators (turned with a handle) when I joined a Lloyd's broker. Became an adviser with a new national brokerage. Learned that the public prefer face-to-face advice rather than often unread information.
1970s. A decade of growth in direct salesforces. Saw the value of building ongoing client relationships. Moved into management. Started own IFA in partnership with former colleague. Annual reviews offered.
1980s. Helped start a new LIA region in Cheltenham and chaired the national education committee, ultimately becoming president in 1988. Ahead of the times, some of us spoke in favour of individual competence testing backed by a licence. At the 1982 LIA Industry Leaders' meeting, we launched our campaign. Eventually, it was supported by many in the industry and Miboc but it needed SIB to deliver minimum T&C standards.
Financial Services Act 1986. It took 10 years for regulation to be understood by much of the industry, not helped by regular changes to the rules and standards required. Fimbra and the IBRC regulated us.
1990s. Considerable developments in IT. Written advice via reasons why letters required. The PIA became our next regulator.
I chaired the SIB training and competence panel which developed and delivered compulsory standards for all giving financial advice. How I wish it had all ended there. A surgeon can do more to my body without a fraction of the information and written risk warnings that financial advisers now have to provide, as much for our own protection, when arranging the simplest financial product purchase. The reason is that the medical profession has public confidence earned through high standards of training and supervision alth-ough still making mistakes. 2000. Became a founder-director of Aifa. Taxation raids on pension funds. Low inflation and interest rates weakened the performance of some existing policies but, rather than admit this, practitioners became the easy target for blame.
Building society rates and equity values fell but life insurance and pension products were somehow expected to perform miracles to avoid being described as rip-offs.
Has disclosure resulted in any greater understanding, especially about the ups and downs of investment? I still hear media commentators referring to promised returns not materialising. What promises? Or I read articles saying that term insurance is better than whole life without defining in what circumstances.
The year also saw the arrival of the “single” regulator, which still means three (FSA, MCCB, GISC). Much has been achieved but are we happy at what the job has become? Doctors and teachers get press coverage for their complaints about long hours but I am not the only IFA working at least 60 hours every week to keep up with it all.
Polarisation revisited. What is wrong with the current clear distinctions? Commercial interest outweighing consumer interest? Sandler has hinted at degrees of advice – surely meaning either product regulation or consumers accepting some responsibility for their own decisions?
I joined a people business but our time with clients has become eroded under an avalanche of correspondence, life office admin failures, three changes of regulator, consultative papers and rule amendments. The costs force us to be more commercial about who we want as clients – social exclusion which I regret.
Knowing the Government is concerned about the level of saving (the public can save – look at the spending on the National Lottery) it should consider the processes required of IFAs in order to advise on financial provision. It is not only teachers and doctors who are overloaded.
Five decades in which those early lessons in the claims department have been repeated in many sickness, death and retirement claims of my own clients. Keep that in perspective. Worthwhile despite the constantly reinvented obstacle course.
Len Warwick is managing director of Warwick Butchart Associates