There was an interesting reaction to a question at a recent Money Marketing IFA Event in Glasgow. Asked what to do to stem the decline in demand for investment products, the panel cited the need for confidence building and education among investors. The question was then turned back on the audience. One IFA observed that he heard much less from investment companies these days than used to be the case.His contention was that the personal touch was missing, so IFAs felt less inclined to recommend investment products. As the panel represented just those sort of companies which apparently were now far less visible, there were many reassurances that the IFA channel remained core to their distribution strategy. Even so, I have a sneaking suspicion he was right. This was borne out by my subsequent trip around the exhibition floor. Perhaps I missed a stand or two tucked in a quiet corner but I do not recall seeing a single investment firm. There were many mortgage providers, lots of technical support, protection and (unsurprisingly) Sipp firms but where were the Fidelities, Schroders or New Stars? The business of selling investment products has changed mightily over the years. Salesforces have been cut back. This may reflect the tougher selling conditions which now exist but is also a reflection of the fact that people are expensive to employ and other channels have opened up for providers. The growth of fund supermarkets and other platforms has changed the landscape of investment selling. Yet this IFA believed very much in the people factor when it came to selling. Being able to look the person in the eye and receive direct answers to his questions were key. Receiving proper literature, rather than downloading an electronic key features document, was an important consideration. But the chances of returning to the old style of investment selling do not look likely. Time is at a premium these days. Helped by technological advances, salesmen are expected to cover more ground. The growth of call centres has also taken away some of the personal contact with clients. I imagine it would be useful for IFAs to have a friendly face with which to discuss the future of the bond funds in which their clients are invested. Part of the reason for recent disenchantment with equity products lies here. Money has increasingly chased bond funds, first as income became more difficult to achieve through cash deposits and equities and then as the bear market unsettled confidence. But risk aversion has returned to the bond market. Triggered in part by General Motors’ profits warning, credit spreads have widened. While you might think the downgrading of GM’s bond status to junk might deliver some comfort to the market (surely a company of the size and prestige of GM cannot default), you only have to look at the size of the problem to realise that a further deterioration of the car giant’s circumstances would have a seismic effect. With 300bn worth of debt and a heavy healthcare and pension burden, there will be no early resolution to the problem. With central banks becoming more concerned over inflation, the outlook for the bond market looks to be deteriorating on a number of fronts. Performance in the immediate future could suffer as a consequence. Diversification remains the prime need when building a portfolio.