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Points of view

I don’t know about you but I can be swayed into a decision to buy if I get money off for multiple purchases, club card points or free gifts. Don’t misunderstand me, the car I want to drive, the clothes I want to wear and the wine I want to drink will be bought, irrespective if there is a social offer.

It is the products that I do not desire that start to interest me if there is an offer with them. Things I know I should have but am reluctant to buy, say, for example, vitamins pills.

Which? is an organisation that has guided people away from making poor choices and occasionally it reports what comes from the ministry of the obvious but when Which? comments on an issue, thousands of people shake their heads knowingly. For example, when Which? visited 40 financial advisers – 21 IFAs and tied advisers from Abbey, Barclays, Bradford & Bingley, Co-operative Bank, Halifax, HSBC, Lloyds/TSB, Nationwide, NatWest and the Royal Bank of Scotland.

Just one-third of tied advisers passed all the Which? benchmarks and one in two IFAs passed its tests. It is unbelievable that 13 of the 19 tied advisers made misleading statements about costs. Would you have guessed that this would be the research outcome?

I bet many of you would have guessed that IFAs generally are better than tied agents.

I dread to think what a future Which? report comparing IFAs (or whatever the RDR calls those that are independent) and primary advice.

Now what do you think about Which? slamming direct sellers of life insur-ance for using marketing gimmicks such as life club card points? Is it a fair statement that life insurance is never desired or willingly bought and needs to be sold or helped along to make people consider it.

Whether we like it or not, Swiss Re estimates that the life insurance protection gap is in the region of £2.4tn while less than half the population has any kind of life cover.

Ron Wheatcroft of Swiss Re says that for this calculation, it estimated that each family should have a lump sum worth between five and 10 times someone’s annual salary.

Now if marketing gimmicks work on me for products I do not really want to buy, what will it do to others that have not seen the old life insurance training video the Widows story at least 12 times? (Poor me).

The theory that risk products should be rate-driven with an acknowledgement that underwriting and claims settlement are at an acceptable service level is solid but these factors alone are not enough to persuade people to buy.

Let us leave the mighty retailers to tempt their loyal customer bank to take out life insurance, even if a couple of pounds could be saved a month. names Bright Grey and Scottish Provident as better providers of life insurance then the retailers.

I agree as self-assurance is one of the best and pioneering protection products to hit the market while the Bright Grey marketing is far from grey and the protection products some of the best in the market.

The problem is that both these firms have spent millions of pounds on their brands in the intermediated sector, not direct.

If I tried to persuade my mum, who is far from being a silly woman, to move her life insurance from Marks & Spencer to Bright Grey so she would save £5 a month, she would laugh as her brand loyalty is so strong to the retailer who clothes her, feeds her and now insurers her.

Come on, you big retailers, use your brand to close the protection gap and make sure that you white-label products from firms such as Scottish Provident and Bright Grey to offer your loyal customers the best of breed and don’t forget the club card points.


Long-distance cyclist

When I advocated Asia and emerging markets for investment in a self-invested personal pension a few years ago, I was castigated by a number of advisers who believed they were far too dangerous for a pension. Retail clients are now besotted with these regions and this has been given further impetus by the dramatic recovery […]

Regulator in listening mode on RDR

The FSA has struck a conciliatory note on the retail distribution review and said it is in listening mode.In answers to questions at the Tax Incentivised Savings Association Conference in London last week, director of retail policy Dan Waters said the regulator does not plan to change the market overnight.Waters said: “I can see why […]

When is £1m not £1m?

Neil Jones is technical support manager with Canada Life’s ican Technical Services Team. Canada Life offers a range of wealth management solutions, including retirement income planning, estate planning and investment solutions from a choice of jurisdictions, including the UK, Isle of Man and Republic of Ireland. The residential nil-rate band (RNRB) was first announced in […]


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