Bear with me for a second or two while I tell you why I intend to fly British Airways at every opportunity I get and why the increasingly bizarre debate over trail commission after the RDR is starting to wind me up.
The story starts with me booking two flights to Rome at the end of last year, where my wife-to-be and myself were heading to get married.
I had obtained quotes from the usual suspects, Ryanair and easyJet but as I proceeded through their online systems and more and more hidden charges were piled on, what had looked like £65 return flight turned into something approaching £115 per person.
It wasn’t so much the high cost of the quotes that made me contact BA – easyJet and Ryanair’s flights were still pretty cheap – but the sneaky way that fees were being added at every turn. To my amazement, BA came in with a quote of £140 each, more expensive but not massively so. Strike one to BA.
Strike two came at the departure gate and on the flight. As we waited to board, BA offered passengers a selection of free magazines and newspapers. On the flight, we were presented with a complimentary drink and nibbles. Imagine that happening at Ryanair, whose boss Mike O’Leary even wants his customers to pay to use the bog on the plane.
Strike three begins, or rather, ends with my wife receiving a cheque for £250 from BA last week, after the airline initially lost her suitcase on our return from Rome.
When it was finally delivered, 36 hours later, we immediately noticed the small padlock on the zip pull had been cut off, with jewellery and lingerie to the value of several hundred pounds missing, plus the damage to the suitcase itself, another £55. The only receipts we had were for £195, so my wife claimed compensation for a total of £250.
Although its customer department responded quickly, BA was unwilling to pay my wife’s compensation claim in full. Happily, after further discussion between my wife and the airline, plus vital help from The Observer consumer journ-alist Margaret Dibben, BA saw sense and a cheque arrived swiftly.
The reason why I now intend to fly BA whenever I can is simple. If this theft had occurred with some discount airlines, I suspect they would have refused to pay us any more than the legal minimum of £60 for the lingerie, plus a token amount for repair to the suitcase and getting even that sum would probably have taken us many more months than it did with BA.
What this experience teaches me is that any business must have two elements to its proposition to consumers.
The first is clearly cost. But anyone who thinks you have to be the cheapest at what you do is wrong – as long as you are within acceptable limits, or can justify your additional charges, you will still win out.
The second, related, point is about customer service. BA was not perfect but anyone who has had experience of the dehumanising treatment meted out by so-called “no-frills carriers” to their passengers will admit they are like chalk and cheese when compared with the regular airlines.
Which brings me on to trail commission. Last week, Aegon warned the FSA will need to be careful about how it polices trail retention after the RDR. The FSA has said trail will stop if advice leads to product changes and trail cannot be paid on new investments but it can continue to be paid in some cases, such as fund switches within life products and in the event of automatic product changes.
Aegon head of regulatory strategy Steven Cameron says there is a danger that by focusing supervisory efforts on trail retention, the FSA will indirectly encourage advisers to move clients out of suitable products. Ironically, his warning follows earlier fears that IFAs would be unable or unwilling to switch clients for fears of losing their trail.
Let’s go back to basics here. As with any other charge, there is nothing wrong with trail as long as it is not sneaky or hidden and can be justified by reference to the additional service you are giving your client to earn it.
I suspect all the angst from IFAs on this issue – and responses to them from people like Steven Cameron – is that those basic principles of customer service have been ignored for too long by too many advisers. Trail became another form of deferred commission.
Those days will soon be over. But charging for an appropriate and quantifiable service will not. If British Airways can do it, so can you.
Nic Cicutti can be contacted at firstname.lastname@example.org