View more on these topics

moore&#39s code

So, the man from the Pru is swapping his shiny suit for a pair of corduroy trousers and a casual shirt, which he will wear to nip down the DSS to pick up his giro. He will be joined by the man from Sun Life Financial of Canada, who found out just days afterwards that he too was “uneconomic”.

Nobody was really surprised when Jonathan Bloomer decided to take the axe to the salesforce which was once a mainstay of the financial services industry. Mr Bloomer insisted that the Man from the Pru was not going, he had merely changed and would be replaced by the telephone and internet men from the Pru – Techno Pru if you like.

But this is a little disingenuous. That brand was one of the few within financial services to have reached icon status and that brand represented the salesforce. Make no mistake, the man from the Pru is no more.

While it is an image that rather amuses me, I doubt our former men from the Pru and Sun Life Financial of Canada will spend much time queuing up with the unfortunate steelworkers from Corus at the DSS. No, they will probably pocket a handsome payoff which will no doubt be followed by a series of lucrative proposals from the likes of Bankhall, InterAlliance, Misys IFA Services, Zurich and the rest.

The interesting question is whether we should mourn his passing. Towry Law&#39s Clive Scott-Hopkins clearly does regret it, competitor or not. He has talked of the hundreds of thousands who have been grateful for home-service insurance over the years. He goes as far as saying: “A national institution has been killed off by the cost of personal services and bureaucratic requirements which the consumer is not apparently prepared to pay or which the Government says is too expensive and not necessary, and they should know best.” I am not convinced.

Neither Pru nor Sun Life Financial has covered themselves in glory in recent years. Pru&#39s salesforce missold more personal pensions than any other. Sun Life Financial of Canada managed to pick up a then record fine from the PIA in 1998 – something Pru avoided by the neat footwork of its former chief executive Mick Newmarch, who decided to avoid the PIA and be regulated direct by SIB instead. The same SIB that could not issue fines and had to content itself with a stinging rebuke.

Pru, of course, is a very different animal today, changing from a bloated behemoth of the life insurance industry into a whizzy operation which makes more than half its profits from overseas, notably the US.

It is less clear where Sun Life Financial is going.

But despite their past sins, the demise of the salesforces raises an interesting issue.

The Government is desperate to increase pension saving in the UK because it does not want to pick up the tab. Many of its financial services reforms have been laudable. The UK consumer has seen charges plummet and some of the industry&#39s more repellent practices have been banned.

I do not mourn the demise of the direct salesforce. I believe the commission-based remuneration that has operated in financial services has been responsible for a number of ills. I declare an interest here as I was, some years ago, a victim.

But the danger for the Government – and, yes, the industry – is that little thought has been given to a realistic and workable replacement which will ensure that the punter is protected while the distributor gets a decent reward.

I am a firm supporter of fee-based independent financial advice but am not so naive to believe that the vast numbers of people who, in the past, have paid commission, will all be willing to switch – particularly those at the lower end of the income scale.

The products that the financial services industry offers, thanks in many ways to Government and regulatory action, have been improving for some years now. The difficulty is getting the punter to buy them. Pensions, life insurance, savings, are not something that one buys on a whim.

People need a push. Life offices may talk excitedly about internet and telephone sales but these channels require the punter to make the effort and it is far from clear whether the same number of people who dealt with salesforces will be willing to make that effort.

IFAs are growing, but I suspect many will be finding their businesses under pressure while the number of people selling long-term savings is well down on 10 years ago.

It is not inconceivable that solutions could be found to the current dilemma but these solutions need careful thought on all sides of the debate. If the Government really wants to increase private pension provision it needs to address the issue of distribution.


Berkeley recruits another Burns Anderson chief for compliance role

IFA network Berkeley Wodehouse has appointed Tim Barton from rival Burns Anderson as its head of compliance. The move comes as the network gears up to change from partnership to plc status on April 1. Barton will join Berkeley on March 5 from the Burns Anderson where he has been a senior compliance officer since […]

Top names lined up for Henderson hedge fund

Isa investors will be able to access some of the UK&#39s leading hedge fund managers for the first time with the launch of a new Henderson Global Investors fund of funds. The Henderson absolute return portfolio will feature top-name managers such as as ex-Barings European manager Crispin Odey, ex-Jupiter director and UK special situations manager […]

Scarborough makes tracks

Scarborough Building Society has introduced the flexible base rate tracker plus moneyback mortgage, which gives borrowers a £275 cashback.The interest rate is 1.10 per cent above the base rate and is guaranteed not to exceed this during the mortgage term. Following the Bank of England&#39s 0.25 per cent cut in the base rate to 5.75 […]

Teather & Greenwood appoints new retail analyst

Corporate and private client stockbroker Teather & Greenwood is appointing David Stoddart as retail analyst. Stoddart joins after six years with Investec Henderson Crosthwaite where he was a research director and retail analyst. He was formerly a retail analyst at Societe General Strauss Turnbull, head of retail research at ANZ McCaugham and retail analyst at […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm