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Inside Edge:Peter Dornan

A happy new year, everyone. And let us hope it is happy although according to the usual band of doom and gloom merchants, we might as well all pack up and head toward the bunker now.

I start the year positively. It is an even-numbered year after all. I am a strange sod about this. I always feel that even years have a lot more going for them.

As we start 2002, the economic outlook for our industry appears to be surrounded by confusion. Confusion over the UK Government&#39s euro willingness (let alone industry and the general public&#39s) and a divergence of views over where the equity markets will end up over the next 12 months adds to the general melee.

Even closer to home, we have the imminent arrival from the FSA of the second consultation document on polarisation. This has been widely billed with blockbuster status. We will soon see if it will have the box office tills ringing.

Add the FSA&#39s disclosure project and the work undertaken by Pickering and Sandler, the Tiner project (the FSA&#39s response to the issues identified in connection with the Equitable Life affair) and 2002 seems to be set for status as the Year of the Review.

Review can sound a bit harsh in this context. If we are to look at some of the financial legacies of the last few years, there is a lot from which we can draw encouragement. And this is what any true review should be capable of doing.

I am not going to add more chapter and verse to the polarisation debate but we have to look at some of the basic facts of the industry. We have record levels of personal and corporate investment in financial services products.

Products are more transparent, offer wider choice, are cheaper and are backed by a more sophisticated delivery mechanism.

The big pension event of 2001, the introduction of stakeholder, has been an undoubted success or, more precisely, the stakeholder effect has. Pensions have never had so much publicity, public and political awareness and investment levels not to mention opportunities for essential advice.

This is an opportunity for further growth and correctly positioned providers, distributors and advisers will be able rise to the challenge.

Stockmarkets for the main part are back to pre-Sept-ember 11 levels. It will be interesting to see how they progress certainly over the next few months. It seems to me that a lot of negativity has been built into market values at present and this in itself could present select investment opportunities.

Certainly when we are talking about investments spanning many years there is no reason for short term investment uncertainty to be a delay deterrent.

The considerable investment that has been made by serious asset management groups looks to provide a sophisticated platform for inv-estor confidence covering both the retail and institutional marketplaces.

If 2002 is to be the year of the review, the reviewers must take account of the product enhancements and a committed drive by major players to enhance all forms of customer offerings.

We should also review developments such as the Raising Standards initiative and offer both support and encouragement for more.

Standards across all aspects of our business must continue on the upward curve.

With the right energy and commitment to improve, we can all make 2002 an even year to remember. And there is nothing odd about that wish and forecast.

Peter Dornan is director of group businesses at Aegon UK


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