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Mark of distinction?

The Raising Standards initiative is banking on IFAs&#39 support to make the quality mark, awarded to the first five brands last week, a success.

But how exactly will it benefit advisers and how long will it be before IFAs can use the quality mark for its intended purpose of raising confidence and ultimately growing the market for long-term savings products?

Last week, Norwich Union, Scottish Equitable, Scottish Widows, CIS and Unum were awarded the ABI&#39s quality mark from the Pensions Protection Investments Accreditation Board, the independent body set up by the ABI.

This means product literature and design across the entire brands&#39 ranges have passed the Saltr standard and can carry the quality mark, which is designed to stand for quality, clarity and service.

The standards are designed to be tough yet not impossible. Whether the fact that five out of five brands going forward for accreditation passed has affected its starting point credibility is not yet clear.

The other thing the more cynical pundits might also note is that two out of the five brands have been directly involved in the development of Raising Standards.

Lawrence Churchill is not only chairman and managing director of Unum but also chairman of the Industry Standards Group which set the Saving and Long-Term Risk manual – the rulebook which brands are judged by the PPIAB to make the Raising Standards grade. In addition, Tom Ross is not just chief executive of Scottish Widows but also chairman of the ABI.

That said, anyone who speaks to either a PPIAB accreditation consultant or the individuals responsible for getting their life offices through the regime will show that Raising Standards is no easy ride.

The estimated £11m collective costs of the first five brands also demonstrates the investment required.

But will other life offices follow? The PPIAB says it has had applications from a number of brands which hope to receive accreditation in November or early December.

However, a number of life offices, including Skandia and Legal & General, are taking a watching brief on whether to go for the quality mark. They are wary of building on sand in light of the with-profits, Sandler, polarisation, disclosure and other reviews.

While ABI director general Mary Francis says the FSA&#39s with-profits review is heading the same way as Raising Standards, it may take a lot to convince new brands that they will not have to return to the drawing board once the outcomes of the round of reviews are known.

IFAs appear to broadly welcome the announcements of the first accreditations but do not expect it to win the war against consumer mistrust.

Hargreaves Lansdown retirement planning manager Danny Cox says: “With five brands already, I imagine other big brands will have to follow. Anything that can be done to increase consumer confidence has to be a good thing.

“Whether this will help with IFAs and their clients is less clear. Although it might act to differentiate between providers, the chances are we recommend products with no capital units and clear product literature anyway, so Raising Standards brands are likely to be recommended by default.”

Klonowski & Co principal Francis Klonowski says: “My immediate reaction to Raising Standards is that you can make product literature as clear or fancy as you want, you can make the products as cheap as you want, but they do not make people buy.

“Any amount of product makeover will not make a jot of difference unless they have confidence in you. This is exactly what clients tell me.

“But anything that shows consumers the industry is being proactive in trying to get it right should be welcomed although I still maintain sales come down to confidence in the adviser, not the product.”


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