View more on these topics

Inside Edge – Tony Kempster

I&#39ll brain the next person who says to me: “What&#39s it like to be back at the Pru?”

It is six years since I last worked for Prudential. In the meantime, it has changed beyond all recognition. Just over 10 years ago, in 1991, there were 9,500 direct salespeople and IFAs accounted for a bit less than 5 per cent of the business. Today there is no direct salesforce and IFAs provide around 62 per cent of UK new business. The focus has indeed changed.

And of course I have changed a bit, too, in the last six years.

Last week I was asked by a well known figure in our intermediary world whether my three years running the DBS network would be helpful in adding value to the job of increasing the profitability and scale (in that order) of the Pru&#39s UK IFA operations

My immediate response was: “In a year&#39s time you tell me whether it&#39s made any difference, because what counts will be what influential IFAs think.” And although that may be a bit too smooth for your taste it is absolutely true.

Not put off by my response, we did explore the lessons learned during the time spent at DBS that would help Prudential add value to IFAs.

The main lesson was the need for many product providers to embrace humility and learn to listen to their customers.

The priorities at the network were to find new members, keep the existing ones reasonably happy and fully compliant, to help them to become more productive and to spend as little money as possible doing it all. Products? Products? The last thing on my mind. Yet too many of these highly paid life insurance company folk would beat a path to my door to extol the virtues of the Pond Life Bottom Feeding Smoke and Mirrors Pension Plan.

Worse still, they assumed I knew nothing about product design. Actually, having spent 10 years at it, I can zillmerise my liabilities with the best of them. Modesty should prevent me from saying that the Prudence bond was a small success of the marketing team I ran during my first tenure at the Pru.

So, there we were being regaled with all the sales pitch, knowing full well they were selling £5 notes for £10 (it&#39s called initial commission on regular-premium pensions).

Apart from nuclear power stations, is there any other industry where you deliberately design your products so that it takes 16 years to get your money back? And we do that in a market where, if the investment performance goes a bit wonky or the service creaks, then the adviser can move the money to another provider without penalty and you lose your shirt. Or your policyholders lose their shirts. Run that by me again?

Talking with another group of IFA friends on Monday last week, they have recently employed their own actuary. The news is that many product providers are betting on the Government making contributions to stakeholder pensions compulsory. Well, probably it will, eventually, depending on how the opinion polls are going.

But do we really believe that, given our current standing in the eyes of the Government, it is going to bail out the industry by allowing us the luxury of a 1 per cent margin on compulsory contributions? Come on!

So, apart from listening very hard to understand what our IFA friends want and need from us, how else might my poacher experience help my new gamekeeper role?

By enabling me to have businesslike, grown-up conversations with IFAs about how we plan only to participate in those markets where we can create value for the end-customer, create value for the IFA and create value for our own shareholders.

That&#39s how every successful IFA I know runs his or her business. For any of us to pretend anything else undermines the future of the whole market as the Equitable Life debacle has clearly illustrated.

Tell me again which side is the poacher?

Tony Kempster is distribution director for Prudential intermediary business.

Recommended

A consumer&#39s view

The Government&#39s proposals to introduce child trust funds and the savings gateway will provide a welcome boost to IFAs who will, no doubt, find wealthier clients wanting advice on where to put this free handout from the Government.The irony is that, as always, those who will do well will be the wealthy rather than the […]

Firms warm to stakeholder

New research from banking clearing house Bacs reveals that there has been as significant rise in the number of firms planning to introduce stakeholder pensions.The research, conducted among 350 businesses representing a range of sizes, found that almost a quarter or 23 per cent will definitely offer a stakeholder scheme compared with only 9 per […]

Millfield recruits five to management team

National IFA Millfield has recruited five new members to it management team as development directors.Their role is to head up branches, act as mentors to other staff, oversee recruitment and help with business development in private, corporate and affinity sectors.The new directors are Graham Day joining from Sun Life of Canada, Richard Cave from the […]

Exclusive Connections tracks base rate

Exclusive Connections has unveiled a five-year fixed rate tracker mortgage that is available for loans of up to 95 per cent of valuation.The mortgage is fixed at 5.99 per cent for the first five years and if borrowers pay the mortgage off during this period, must pay 7 per cent of the sum repaid in […]

How do you choose the best online service?

By Ross Jackson, senior marketing manager There are many different protection online services available in the market and no doubt you’ll have used a few when submitting protection business. But why should you have to put up with slow, unresponsive sites for your business when you’re used to dealing with slick, modern user experiences in your […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com