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Independent View

Not long ago I read an art icle by Inigo Bing, a metropolitan stipendiary magistrate, which discussed how an aphorism by Sir Isaiah Berlin, the philosopher, could be applied to the changes that are taking place in the criminal justice system.

Although I had heard of Sir Isaiah, my knowledge of his life is limited to the contents of his obituary in The Times last year (guests at social functions often mistook him for Irving Berlin, the composer). The aphorism, which is famous in the world of philosophy, describes knowledge and activity as either like the hedgehog or the fox. The fox knew many little things, but the hedgehog knew one big thing.

It seems to me that our day-to-day dealings with our clients can be considered to be fox-like. Each day, as we see our clients, we deal with a succession of little things that have no connection with each other, and to which we apply the knowledge that we have acquired throughout our working life.

Furthermore, this knowledge is itself built up on a series of little things, based on our experiences in insurance, investment and human relationships.

Because of the way it is acquired, our knowledge can only be of the parochial nature, so that we have no need for a wider view. Indeed, we are so busy dealing with all these little things that are unconnected with each other that we forget about the hedgehog who knew one big thing.

Don&#39t look now, but the hedgehog is being born as a result of the state becoming more and more involved in the insurance industry.

A start has been made by the replacement of Peps and Tessas by low or nil-commission contracts such as Isas and in the future we can look forward to a complete revamp of the pension system with its emphasis on stakeholder pensions and to the publication of potentially misleading league tables of fund management charges.

This will affect everyone in the insurance industry, because the state will enforce its own ideas of what it thinks is best for a large proportion of the population by the simple expedient of positioning the relevant goalposts. Why? Because, rightly or wrongly, the Government perceives the insurance industry as populated by companies which market contracts with high charges and which are sold by people who are driven by high commission.

If you, the reader, have the courage to consider this view objectively, you will have to agree – however reluctantly – there is more than a grain of truth in this perception.

Whether we like it or not, the changes the Government proposes to introduce during the life of the present Parliament will happen, granted its overwhelming majority. It is pointless to get up petitions, have “consultations”, lobby MPs or any of the other paraphernalia that people get involved in when they see the writing on the wall.

In four or five years&#39 time, the hedgehog will have well and truly arrived for the insurance industry. We will be part of a large machine whose functions are controlled by the state even more than they are now. IFAs will either have to adapt, for example, get used to a lower income, or change professions. If you have ever had an ambition to drive a train, I suggest you now start giving it serious consideration.

The bread and butter business that keeps the average IFA in funds will have all but disappeared because of state initiatives that will have been introduced to counter the practice of far too many IFAs ignoring the needs of the man on the Clapham omnibus and concentrating on the needs of the businessperson on Eurostar.

The state, by its nature, never takes second place to the individual. By reducing to a minimum the need to take into account the little things and concentrating on the big thing, that is, the potential of the industry as a complete entity, the state will ensure that individualism will slowly die off.

It may not be pleasant, it may not be acceptable but, in a way that none of us could have foreseen, the one big thing will be with us, and the state will have won the battle to control the financial lives of most of the population.


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