View more on these topics

Panel servitude

There is an ever growing trend in the independent sector for IFAs not only

to deliver but to demonstrate clearly that theyare truly independent. This

is being achieved with the help of highly functional product research tools

that enable IFAs toformulate client-focused product recommendations.

Consumers are more than ever looking to their IFA to prove both the

quality and independence of their advice. A number of leading IFA firms

have recognised that the use of panels is not tenable or even acceptable to

many clients.

Can IFAs recommend a product from a restricted panel of approved contracts

and still be considered truly independent? In the past, it could be argued

that the thousands of products in the marketplace meant that a detailed

knowledge of a smaller range of products was better than a very sketchy

knowledge of the total marketplace.

But new technology has blown this argument out of the water. Highly

functional research solutions give IFAs the ability to analyse the entire

marketplace quickly and accurately, tailoring products to specific client

needs while maintaining compliance with increasing regulatory requirements.

A critical distinction between the two methodologies is the starting

point. A panel is based on the researcher&#39s criteria whereas a truly

independent approach is focused on tailoring solutions exactly to the

stated needs of the individual client.

To this can be added the commission factor. The perception among many

consumers – and certainly the press – is that IFAs choose panel providers

because of a number of subjective factors including higher levels of

commission. This is why client-based advice, rather than product-based

advice is of paramount importance. Using existing technology, IFAs and

their clients can select the criteria which shape the list of the most

suitable products. Commission is then an irrelevance in the process.

One of the most complex areas of an IFA&#39s life is product research. A

leading compliance firm recently produced results showing that IFAs spend

only 15 per cent of their time with their clients. Using new technology,

IFAs can proactively involve clients to enhance the decision-making

process, adding further value and removing uncertainty.

Client-centred software provides a detailed audit trail and comprehensive

reasons-why reports, drastically reducing administrative time and

headaches. IFAs can then dedicate their time more efficiently to enhancing

client relationships rather than being researchers and report writers.

The plethora of financial websites is allowing consumers to carry out

their own research. While power is now deemed to be in the hands of

consumers, in reality, the internet is currently only providing information

and price rather than knowledgeand detailed financial awareness.

But access to comparative financial product information will cause many

consumers to demand justification of their IFA&#39s claims of true


The use of panels will further place power in the hands of only a few life

offices, squeezing out the more specialist and niche product providers

which offer vital services to clients.

If two product providers on a panel merge, will this further restrict the

choice offered to clients? Or will the IFA include also-ran providers,

which they would not normally include, just to make up numbers?

In conclusion, there are valid reasons for IFAs which currently use panels

to embrace technology as a way of ending their reliance on them. Perhaps

most important, the consumer is already demanding it. Alerted by the almost

constantly negative coverage in the media and empowered by the internet and

access to financial information, consumers are asserting their right to

have optimum choice.

We believe there will be a fundamental shift from product-oriented sales

to comprehensive financial planning advice. Today&#39s technology allows the

recommendation of a specific product, its purchase and associated

administration to be carried out in a fully compliant and efficient way.

The IFA&#39s role then changes to offer clients a full range of

lifestyle-led, forward-looking financial planning products which is

unquestionably truly independent.


£365,000 handshake for Reliance chief Bateup

Reliance Mutual has given chief executive John Bateup a golden handshakeof £365,000 despite a solvency crisis.He was paid the sum last December when Reliance was having to use itswith-profits fund to cover a massive pension misselling liability insubsidiary the British Life Office.Free assets then amounted to £5.4m but £5.3m of this was drawnfrom future profits, […]

Change old with-profits ways

It is understandable that the latest regulations for with-profits fundsunder stakeholder require those funds to operate without being subsidisedby funds that have been withheld from previous generations of with-profitsinvestors.To do otherwise would be contrary to the need for transparency which is atthe heart of stakeholder pensions.Imagine the fog that would descend over such funds the […]

Barclays starts bid for small business pensions

Barclays has begun its onslaught into the smaller business pension arenaahead of stakeholder in April 2001 with the launch of its group retirementaccount.The bank will be targeting the GRA group personal pension at its 500,000smaller business customers. The move is in direct competition to IFAs whoalso see smaller businesses as a prime target in the […]

Supermarkets sweep in for fund showdown

The fund supermarket world is about to get exciting. As four of the UK&#39sleading fund providers get together to launch an IFA-based onlinesupermarket in November, the stage has been set for a big showdown.The new company, to be called Consolidated Funds, will be set up with£20m from Gartmore, M&G, Jupiter and Threadneedle which have around […]


Almost nine in 10 employers admit failings with post-DRA compliance

The default retirement age (DRA) was abolished more than three years ago, yet new research from Jelf Employee Benefits suggests that the vast majority of employers still have some way to go to fully understand, comply and communicate the landmark legislation change that prevents older employees being forcibly retired on the grounds of age alone.


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