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Inside edge

There is more to Raising Standards than acquiring a new logo. History is full of examples of those who led the way in their field but were ridiculed for their beliefs or achievements during their lifetime.

The UK financial services industry is peppered with examples. Given that the industry is frequently charged with being conservative and resistant to change, it is perhaps surprising that more of the leading players are not receptive to the concept of change, or even prepared to light the path to change – let alone moving to revolutionise the market place.

It seems to me that whenever the prospect of change is mooted, the industry tends to recoil, rather than grasp the nettle of change. In doing so, we risk not only missing out on development opportunities but, more importantly, alienating our most crucial stakeholder – the end consumer.

Just a few years ago the industry railed at the prospect of Isas replacing Peps. The idea of radical change to a mainstream investment product twice in one decade was apparently inconceivable for many providers. In the event, it was a shot in the arm for the investment industry.

The AITC&#39s Its campaign has been dismissed by many industry observers but there is no denying that the basic premise – to increase consumer understanding of investment trusts – is a sound one.

To the credit of the Labour government, it has possibly embarked on more initiatives to improve the lot of the average consumer of financial services products than any other administration in recent years.

Yet the industry&#39s response can hardly be judged as wholly positive. There is talk of review overload and a general tendency towards avoiding the real issues, rather acting in unison to improve things.

The most recent example of change within the financial services industry has been the ABI&#39s Raising Standards initiative, which seeks to improve consumer understanding.

This is something which in other markets would hardly constitute a radical sea change but is of utmost importance to our industry.

While nobody imagines that Raising Standards represents the panacea of the industry&#39s ills, it is a significant step forward in our mission to improve consumer understanding, something which should be central to every life company&#39s agenda, particularly in the wake of Equitable Life.

The majority of insurers have expressed their solidarity with this initiative and are taking steps towards achieving accreditation. Industry observers who have the interests of consumers at heart have acknowledged the part that Raising Standards will play.

A few external commentators have dismissed Raising Standards as a marketing gimmick with one of the negative factors being that only five brands have been accredited.

While it is true that Raising Standards will become even more valuable to consumers when the next wave of 25 brands are accredited, there is no reason to dismiss the efforts of those brands who sought to be among the first to pave the way for change.

Jack Welch, the influential former chief executive of GE Group, has some interesting views on the importance of change in any market. Learning to love change is an unnatural act in any century-old institution, he acknowledges.

But he describes his former company as one that sees change as a source of excitement, as an opportunity, rather than a threat or crisis. We strive to have everyone see change as a thrilling phenomenon. It is the oxygen of our growth. As an industry we would do well to take this on board when looking to the future.

Peter Dornan is director of group businesses at Aegon UK


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