Those involved in the business insurance market will, I am sure, confirm this is the case. One of the most frustrating reasons why more business is not done in this area is because the product provider does not provide enough supporting documentation to facilitate implementation of the complete solution.
This is not to say providing such supporting documents does not carry with it some risk. However, these risks have been readily accepted in the pension market (with trust deeds, announcements and booklets being freely dispensed as part of the solution) and can, I believe, with proper thought and consideration, also be adopted in the business insurance market.
Indeed, I believe this is essential if providers and advisers are to secure the level of success that can potentially be achieved in this market.
Providers should be moving to a position in the business insurance market where complete documentation pack is seen as the product. Once this occurs, we will have achieved a paradigm shift in another area of business.
A further area where this shift is necessary is, I believe, estate planning. In this market, a number of product providers have, of course, achieved this. This is patently obvious by the proliferation of single-premium-bond-based inheritance plans. Here, the product is a combination of the investment bond and the surrounding trust and, where appropriate, other documentation.
The way in which the product is marketed is as a solution incorporating the combination of trust and product. The trust is seen as an intrinsic part of the solution and not as something that is merely added to the product.
Both estate planning and business insurance are areas of the market where the mere delivery of a financial product will not provide the solution to a client's problem. What the client values in these areas is advice on how to solve what is perceived to be a difficult problem. There is seemingly a myriad of potential answers, some of which the client may be vaguely aware of and many of which he will not.
Whenever life becomes complex, people value advice that they can trust.
Trustworthiness is something that tends to shine through from a fairly early stage in a relationship but it is also something that can be earned, especially in financial services, by providing client-centred solutions that work. An adviser's professionalism will be demonstrated through uncomplicated explanations and articulations of the strategies delivered with certainty.
Product providers have a real and continuing role to play in facilitating this clarity and trust by operating as the business development partners of advisers. Clearly, where the adviser is tied, this partnership will be very much in the interests of the provider. Where the adviser is independent, then the provider needs to be confident that it has a suitable product that is capable of being recommended within the context of a complete solution.
Once the provider has done that, it can embark on the differentiation process by providing professional develop-
ment and wider product-related solutions. If all this is done effectively, then the provider will genuinely be seen as a deliverer of solutions.
By continuing to work with the adviser in supporting him both reactively (say, by answering questions) and proactively (by providing reasons to continue to contact existing clients and to secure new clients), this will be endorsed.
Fund management groups are not exempt from this process. If the chosen (or one of the chosen) distribution channels is the independent financial adviser, then it will be increasingly essential for fund management groups to look at their role in developing business from these advisers.
As I have discussed earlier, a reasonable place for anyone in the industry to take this look is from the standpoint of the people with whom they seek to do business. What will these people value from the relationship?
Of course, the adviser will require as a necessary first condition to be satisfied that the financial products that are supplied (in this case, offshore and onshore funds) are capable of being recommended, offering consistently good performance, flexibility and an acceptable charging structure.
However, while there is scope for significant differentiation on these grounds, particularly with regard to per-
formance and charges, the acceptance of the role of the provider as a solution provider creates an even greater environment in which to differentiate the company.
The scope to do this for fund management groups is not insignificant.
I will look further at the role of fund management groups in delivering complete solutions next week.