It has been interesting to see yet another “oldie” – LIA executive member Brendan Power – coming out against the merger with Sofa (Money Marketing, September 30). It would be interesting to poll the former executive members as a group as there must be well over 100 of us now and we can claim to have a far wider view than most individual members of either organisation.
OK, perhaps we are on a nostalgia fest but there has been a very noticeable polarisation – forgive me – over the last few years between the big and small operators. The merger simply moves it further.
The LIA has been abandoning its roots for some time now. The removal of life insurance from the title – dirty words. The distaste for commission – another dirty word. The suggestion from John Ellis that ethics should be taught as part of a training syllabus. It all boils down to a fee-hungry elitist group who want nothing more than a handful of providers distributing through a handful of giant intermediaries.
The proponents, as exemplified by gentlemen such as Paul Tebbutt and Ken Davy, have achieved much except the humility to remember their humble beginnings as door-knocking insurance salesman.
We face a dismal future which, once upon a time, the life insurance industry was equipped to combat. Living too long and dying too soon. Nothing is that simple now. Gone are the days when we could sell protection and savings in a sensible package in 20 minutes.
Of course, villains took advantage – they always will in a free market. But, remember, no villain could have existed unless there was a provider willing to take the business. Every provider was capable of putting in quality checks but very few ever did. You cannot make a paper clip in a factory without quality control, yet the providers refused to exercise any sensible controls on business quality.
This led to compulsory regulation, which is universally agreed to be way over the top. So where are we now? A youthful sector of the population are told they must save and protect at a time when they will be repaying their education loans, looking for a house, having babies and needing to provide for retirement. If we ever move to automatic contributions to pension schemes, unless there is an opt-out (probably the only way to salvage the economic future), then the personal distribution system will be dead once and for all.
Of course, there is hardly anyone left who is able to sell them the products in an industry which has decimated its salesforces and is lurching toward a fee-based profession. All this under a socialist (sic) administration. Maybe too many people got rich under the old system.
I sold loads of savings plans to my contemporaries (and myself) when I was 30. Now, at 61, we are looking forward to our extra £30,000 or so at 65. Under present rules, I could not have sold them and no one would have bought them.
Mind you, some of my more upmarket prospects refused to do business with me. They always dealt with Equitable Life and Permanent for general business.
The sad fact is that the life insurance sales and marketing industry has virtually disappeared as far as the man or woman in the street is concerned. Unless you are part of a big affinity group, you are unlikely to receive any advice or a sensible product that goes with it.
Now we are promised an equity-release scandal. How many providers looked carefully at the individual paperwork to see if the product was suitable client by client? Sorry, I forgot, it is the intermediary's responsibility to do that.
Derek Forbes Orford, Suffolk