One of the beauties – and dangers – of the internet is that it delivers stacks of information about you to friends and enemies alike. Your entire life history, or at least a partial version of it, can be found by carefully trawling through the nooks and crannies of the web.
For journalists like me, it provides endless opportunities for reading and research, comparing what people say at one stage in their careers with comments at other points in their lives.
Which is how, last week, I found myself looking up Howard Flight, or Baron Flight of Worcester, as he is officially known.
Last week, Money Marketing reported a speech he gave in the House of Lords, attacking the potential effects of the RDR, where he said: “There will be a significant shambles in the savings industry next year.
“The insurance and life companies tell me their systems are nowhere near ready and they are not clearly organised as to how to conduct their business post-RDR. There is a very powerful argument for a pause if not some adaption.
“The FSA, FCA and Treasury are quite complacent about what is going to be a serious situation for those who are not professionals, used to paying fees or with modest savings. They will be left with very few conduits. It is a particularly undesirable outcome.”
As a result of speeches like this, Lord Flight is well-known to readers of this paper. Only a few months ago the paper ran a profile of him in which he was described as “something of an IFA champion.” In reality, like most people, Lord Flight is a little more complicated than that.
He is certainly muscularly outspoken. As his profile said, Lord Flight, then representing Arundel and South Downs in the Commons, was barred from standing as a Tory MP in 2005 after being recorded at a private meeting backing deeper cuts to public spending than proposed by the Conservative party at the time.
Two years ago, just before his accession to the Lords, he was reprimanded by David Cameron after telling the Evening Standard he opposed cuts to child benefit on the grounds that “we’re going to have a system where the middle classes are discouraged from breeding because it’s jolly expensive. But for those on benefits there is every incentive.”
His financial services career is equally interesting. We are talking about a man steeped in the industry, from his beginnings in investment management at Rothschilds, followed by several years working for HSBC in Hong Kong and India.
Having joined Guinness Mahon at the tail end of the 1970s, he set up what became Guinness Flight Global Asset Management, of which he was joint managing director until it was acquired by Investec. Lord Flight remains involved in the industry as a director for a number of investment funds.
What is striking about his career is that most of it was forged in the City’s buccaneering period, where regulation was light to non-existent and where matters of high finance were assumed to be the preserve of clever people like him.
Consumers like us either “got it” or they didn’t, in which case we were required to accept what came our way from those who knew what was good for us.
Which is why it is not entirely correct, in my opinion, to say Lord Flight is an “IFA champion”. In his time at Guinness Flight and at Investec he obviously understood the value of his companies’ primary distribution network. But his concept of IFAs is quite idiosyncratic.
Back in 2001, when still an MP, Lord Flight attacked the Sandler Review at a conference of the Pep and Isa Managers’ Association: “I smelt an establishment bias lurking and a notion that IFAs are rip-off merchants.”
The notion that IFA incentives are not aligned to those of clients was 15 years out of date, he added, concluding: “Sandler seems to have missed a crucial point: those who use IFAs are entirely the sophisticated population.”
Quite how commission “aligned” IFAs’ interests with their clients’ was not explained, sadly.
In other words, far from seeing IFAs as the transmission belt to popularise savings and investments across the vast swathe of the population, Lord Flight saw them as serving a far narrower segment.
Unless his views have changed since then, to characterise IFAs’ clients as “sophisticated” but then suggest they somehow do not have the wherewithal to understand the differences and potential benefits of advisers’ different remuneration structures strikes me as contradictory.
Where Lord Flight may have a point – and this is the issue I suspect he is getting at – is that there are sections of the life and old-school bancassurance industries that are unable to come to terms with the more onerous requirements imposed by the RDR and regulators on those who simply want to flog financial products to punters.
Actually, as I and some IFAs have long argued, this hands genuine independent advisers a small potential competitive opportunity. It puts IFAs on a more equal footing with other salespeople for the first time since the abandonment of polarisation a decade or so ago.
But that’s not what Lord Flight intended by his speech to his fellow-peers – which makes him slightly less of an “IFA champion” than one or two readers of this paper believe.
Nic Cicutti can be contacted at firstname.lastname@example.org