Last week, I explored this theme further when I spoke at the Million Dollar Round Table Experience meeting in Tokyo to an audience of 7,000 delegates.
The top three countries represented were Japan, Korea and Singapore. The conference was a taster of the main MDRT annual meeting, to be held in Toronto in June.
During the trip, I had the pleasure of meeting senior representatives of various financial services distributors and associations from a div-erse range of countries. Without exception, every one of them was enthusiastic and ebullient about the prospects for growth in their respective countries. Furthermore, having analysed it, they all mocked the UK regulatory regime, condemning it as too harsh and excessive. They found it simply bizarre that the Government, through the regulator, failed to appreciate the value of the retail financial services industry.
Even though they made well informed and incisive observations of what was happening in the UK, they were not up to date with the latest shenanigans of the retail distribution review. After I had elaborated how these regressive and ridiculous proposals would lead us back to the Stone Age, under the guise of creating a Utopian financial services landscape that had no foundation in the real world, their laughter was uncontrollable.
They collectively explained that the attitude in the Asia-Pacific region was that financial services, and the life insur ance industry especially, was the foundation of inter-generational wealth. The governments there recognised that, by encouraging the population to own significant amount of life insurance, wealth was being created by the transfer of funds from insurers to individuals, to provide support for dependants who may rely on the state otherwise..
Although not dismissing the need for rules and regulations, they felt that the UK had gone too far and was stifling innovation. They could not comprehend how their industries were expanding whereas the number of UK advisers had collapsed. They felt that this could not be good for society, as, unlike the FSA, they recognised that advisers were needed to persuade the public to save and insure.
Is there a message that the FSA should take from this? Is it even interested in knowing what is happening successfully elsewhere, for fear of exposing itself as the architect of the damage that has been and is being caused to our great profession here?
There are numerous points that the FSA could consider. For example, why is the financial services sector in other countries growing and prospering while we are tackling doom and gloom and constantly faced with adapting to moving goalposts? Why is the number of advisers else-where expanding while ours is collapsing? Is there any correlation to this number and the collapse in the savings ratio? Surely, in a bigger economy with a higher overall standard of living, we should be a profession in demand.
Why is life insurance (for its original purpose of protection and savings, not lump-sum investments) dying out in the UK? Why are insurers closing excellent products here, citing lack of demand, when providers elsewhere are keen to innovate modern products that are better than we ever had? Is the lack of demand perhaps anything to do with regulation or government interference?
It is interesting to attend international conferences to compare what is working in the rest of the world. It would be even better to go with a sense of pride about the UK’s retail financial services profession rather than have it seen as a laughing stock.
Bhupinder Anand is managing director of Anand Associates