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Loose change

When asked if a person can change, any self-respecting psychiatrist will tell you that for any progress to be made, the person will want to change. This year will be remembered as a year when change was very much on the agenda but not everyone was prepared to change at the required pace.

Depolarisation was brought to a standstill when the menu became the cornerstone of the revised marketplace and when this was added to the proposed style of status disclosure, the appeal of the multi-tied solution lost much of its lustre.

I remain unconvinced as the menu will simply increase the focus on costs when it is the value of advice that we should be promoting.

CP121 had proposed a clear means of status disclosure with fee-based being the key differentiating element for those who want to remain independent. Despite the clarity that this concept promoted, this ignored the realities of the current IFA marketplace.

As the bulk of the market continues to be financed through generous commission, the move to fees cannot happen overnight and has to be part of an ordered transition if we are not to see the number of IFAs reduced dramatically.

As the time for the menu to appear slipped by, it became clear that the tied sector did not hold the same level of enthusiasm for the menu as the independents. I suspect that we will see the banks allowed to avoid the menu although this may prevent them

manufacturing their own products.

Another key issue in 2003 was professional indemnity which remains an imperfect and expensive solution to a manufactured problem. We find ourselves paying significant amounts which provide cover with excesses which are far higher than the average claim. We are paying for cover that will rarely take effect and surely an industrywide scheme on a stop-loss basis would be a more pragmatic solution.

With-profits continues to stage a last stand that rivals General Custer at the Battle of Little Big Horn. There is no doubt that the investing public prefer investment options where downside risk is minimised or preferably removed altogether. This means that the invidious market value reduction is not tenable and as yet none of the proposed solutions seems to provide all the aspects that the public and Sandler seek. Let us hope that with- profits starts to reflect its name more accurately or quietly fades away next year.

My last reflection is the one- sided approach to contact so favoured by the major prov-iders. This year has seen sub-continent call centres proliferate as management consultants employ their simplistic cost reduction ideas and these take precedence over customer

relations. Call centres only really work for basic enquiries and somewhat ironically, these basic enquires could be serviced even more economically with a web solution.

What we need is call centres to be populated with skilled staff capable of taking ownership for problems or enquiries in direct contrast to the current approach or are the providers trying to drop a hint that we are just too demanding to deal with?

I just hope that the menu does not lead to indigestion, PI is killed or cured, with-profits means what it implies and that the growing trend to locate call centres overseas is reconsidered. Best wishes for 2004.

Robert Reid is principal of Syndaxi


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