Who on earth takes notice of reports which seem to gain additional credence by trying to change more and more of systems that have worked for the last 15-plus years?
We hear that people who have not previously invested do not do so because of complicated products and the fact that advisers are paid commission – absolute rubbish.
If people take the trouble to find a good independent adviser, this gives them the confidence to invest and the sad fact is that very few people in the target group take the trouble.
This will not change if they pay fees for the advice and nor will it change if they themselves have to do their own research.
The Government then tell us that the cheapest products are the best. On this basis, why do MPs seek to increase their salaries and, incidentally, their pension provision? Surely, on this basis, huge savings can be made by paying MPs no more than the average wage?
Obviously football clubs such as Manchester United which pay a lot of money for their players will perform no better in the league than the local village club which “wastes” very little money in this respect. We shall need to see whether it is the local village teams or the Premier sides which seem to feature most strongly in the FA Cup competition and others.
To return to the business of finance, many people believe that IFAs receive the commission for advising clients but the reality is that this is, for most of us, less than 20 per cent of the job and the rest is in translating our clients' instructions to a basis on which the life/pension/investment company can produce the appropriate documents and, equally, translating the very complicated documents which the various institutions are required to issue back into the sort of language that our client can understand.
In addition, we spend an enormous amount of time correcting the many errors made by the life and pension companies and, although theoretically we can charge the companies for our fees,the reality is that this is very time-consuming and sadly, from my own experience, results in lower claims than we would like.
Incidentally, it would be nice to see a specialist company devoted to pursuing IFA fees on a realistic level and knowing the best way to take companies to court if the correct redress is not paid but that is another issue.
I have personally been in the business for a number of years and the good news is that I shall not need to put up with so much interference for much longer but the bad news is that I shall be relying on one of the pension companies for my annuity. With the lack of financial strength of so many companies, as quoted recently in your publication, coupled with the above and the Government's apparent insistence that the companies should squeeze their margins even lower, what hope for the industry?
If IFAs disappear and the life and pension companies are left to talk to the former IFA clients directly, the amount of extra staff they will need will far exceed any savings in commission costs.
As I say, this does seem to me to be such a crazy world.
JJ Russell Green
Colwall, Malvern, Worcestershire