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Letter to the editor: Simple product concern misplaced

Dear Sir,

Concerns from advisers are missing the point of the Treasury’s project led by Carol Sergeant. 

Their criticisms are:

(a) danger of misbuying a ‘lower quality’ protection product;
(b) rejection of the BSI kitemark suggesting it is an upper-end-of-scale product and (c) it has been tried before and failed (CAT standards and stakeholder products);

 These negative comments come from product (or advice) sellers who should know that:
(a) Any form of savings or life insurance is better than none
(b) a recognisable, respected logo is desperately needed for consumers to begin to regain trust from an industry that has, as a whole, immensely betrayed their trust – through greed, incompetence and fraud, and
(c) the last comment displays sad ignorance; ask any Olympic medallist.  

 The Simple Products team found that:

(a) 30m adults have insufficient savings (8mn have none);
(b) 20mn adults with dependents have no life insurance, and
(c) very low levels of financial literacy exist across the nation.

 In “Simon’s View”, Emma goes further saying that adding a layer of “fair-deal-but-not-best-buy” just adds another layer of complexity to an already a bewildering choice of products.
Really? Do four new (government-approved) products added to the 23,000 financial product choices and 2,000+ mortgage choice variations (non-approved) justify her “fair-deal-but-not-acknowledged” critique? 
All Advisers should inform clients enthusiastically about these new ‘plain vanilla’ products. 

 Why? Because they will refer these products to their less well-off elderly, friends or kids;  helping them to make decisions they need to make, and giving you the credit for the free tips.
Secondly, it opens the discussion with no sales pressure so clients can understand the basics, especially on life insurance (even for the HNWIs).
What a gift to start a conversation (like NEST). From there it should be possible to judge if higher options that Advisors offer are appropriate. 
Is this not Best Advice and TCF?    

I attended an IFS talk last week given by Carol Sergeant. We spoke with her afterwards for some time.
I left convinced that her team’s thorough efforts in the past 17 months were in the best interest of the unloved mass; unloved by advisers for opportunity cost reasons. Furthermore, post RDR, this project could not be more relevant due to the sudden advice vacuum in the mass market.

 Readers need to know that she chaired this Steering Group pro bono. Over 50 organisations took part across the entire financial services industry. 

Let’s stop bickering, be positive and help rebuild the finances of even those who cannot afford our services. 

Only then will the UK regain its dignity and strength – before the EU collapse (in 2014) and China’s world dominance (predicted in three years’ time) have a chance to overwhelm us.

Jon Golding
Chief executive
Success100 Corporation


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There are 6 comments at the moment, we would love to hear your opinion too.

  1. Mr Golding,

    I can so tell that you are all knowing about how best to do business in this changing & challenging new world environment, however when living in ivory towers it is difficult to appreciate the realities of life at the sharp end !

    It would appear to be true that those who cannot do, teach instead. You say that some saving is always better than none – is that indeed so !! What would you say to the client who has a 6 month life expectancy or a loan that is cripling someone on a high interest rate, or how about a great little deposit plan that pays 1% interest when inflation is running at 5% pa. As to pensions, the ultimate savings plan, for a basic rate taxpayer within 5 years of retirement, I would not go anywhere near a pension with over 23 years just to return your own money without interest !!! What a good deal ! – lets all flog lots and keep the pensions offices in business !

    As to adopting feel good bro bono and low cost products & services to promote yourself, by all means please feel free to indulge yourself and when you find yourself unable to cover the ever increasing regulatory costs and overheads due to not actually having earn’t anything, just pass on your bankrupt liabilities to the rest of us mugs to pick up !

    Instead, why not just get real and try and understand how hard the majority of us small independent advisers are already being forced to work just to survive and pay the bills !!!

  2. Denis B
    If you are going to challenge anyone in the public press then at least say who you are first.
    Anonymity callls into question your credibility and motives, perhaps even your hidden agenda?
    If you care to look me up on Linked-In you will see that I do have the necessary background to justify my comments.
    That said, I will refrain from defeating the points you frivolously made with counter fact and argument.
    On the other hand if you care to open your identity to Money Marketing readers I am happy to oblige.
    Have a nice day
    Jon Golding

  3. Some good points but I wonder if Jon (and the Simple Products team) are also missing a point.
    There are enough “simple” products around (how much simpler could we make a deposit account, or a 10 yr term assurance?) but most non-engaged consumers do still need quite a bit of leading. And “simple” products alone will not therefore work just as they dont impact much already on their own.
    And the reason there is less “leading” is that it is virtually impossible to deliver decent professional advice simply, safely and cheaply enough to take part in this market because of the regulatory burden.
    The challenge and opportunity in my view is for the regulator to “allow” simple product advice to be given SIMPLY (where appropriate) ie in less than 30-60 minutes front to end.
    For defined simple advice scenarios, the FCA could waive loads of rules, waive the pursuit of “perfect” advice, waive the need to collect every scrap of information and document everything; yes, I know there will be times when something is missed or goes wrong, but thats a decision of balance – you just cannot provide SIMPLE advice quickly enough to be cost effective to the mass market with the current system.
    In comparison, my GP deals with me in about 15 minutes and its my health he’s messing with!! Why cant something like that work for our industry – it wouldnt be perfect (neither is my GP!) but then its got to be better than nothing at all happening.

  4. Good article, but I agree with Paul Harding, I this not a product issue, they already exist, it is ability ton arrange small ticket products without the time and risk to the distributor exceeding the price they can charge. It is also about marketing and distribution costs, oh yes Retail DISTRIBUTION review NOT qualifications and charges review!

  5. It doesnt matter how simple products are – advice is not simple and people dont wake up in the morning and think I need some life cover or a pension (as demonstrated by the disaster called stakeholder which has led to the pseudo compulsion called NEST).

    I need x amount of life cover – sounds simple – but do i need critical illness as well? what about waiver of premium maybe and should it be in trust and if yes what type of trust and do I know the consequences of using the wrong type of trust.

    As is demonstrated above what started out as simple life cover soon gets complicated.

    Ultimately the people who are most likely to DIY using simple products are probably those that need advice.

  6. I agree with Paul above.

    The drive towards simple products is a bit misleading. Simple products already exist. Jon quotes figures of 30m adults with insufficient savings and 20m adults with dependents and no life cover. Simple products to plug these gaps are already available with little to no history of complaints or miss-selling. So the question is what is the real cause of the gap?

    I think the answer is public apathy! Instead of wasting time coming up with ideas for even more simplified products more time should be spent figuring out how to engage the public with advisers. A nationwide advertising campaign extolling the virtues of advise would be a start.

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