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Prescription for a healthy industry

So CP166 has driven a ramrod through the whole concept of polarisation. This is where my 22 years in financial services come back to haunt me.

In 1985, I worked as a broker consultant for NEL Britannia (now Unum), which was renowned for its market-leading permanent health insurance contracts. I spent much of my time calling on Sun Life of Canada, Allied Dunbar and Abbey Life direct-sales consultants and managers because their organisations did not have their own PHI contracts at the time.

We were quite happy to offer an agency to anyone who asked and their companies were happy that clients&#39 needs were being looked after. Of course, they were also preventing other salesmen who could offer PHI from getting a hold on those clients.

However, this form of unofficial gap-filling worked well and clients were well served – although they may not always have had the status disclosure which we are now familiar with.

But the latest proposals fill me with horror. Why? As a businessman, there are many opportunities that will arise if these proposals are implemented and perhaps I should keep quiet and not complain. However, as an advocate of higher professional standards, my conscience will not allow me to.

I was under the impression that we are an emerging profession striving to put our clients&#39 needs foremost at all times and making their dealings with us as straightforward and understandable as possible. Indeed, the Pensions Green Paper wants to simplify matters by amalgamating eight pension tax regimes into one.

So, how does it help to allow a business to be independent in one category (let&#39s say pensions) and tied or multi-tied in another (such as life cover)? How does being independent for advice and tied for fulfilment increase consumer understanding and confidence?

I liked Robert Reid&#39s tied and independent hat (maybe it could be three-sided to include multi-ties) as a way of signifying the difference but, in reality, surely more not less consumer confusion will be created?

The blurring of polarisation is not good for anyone. If we want to continue to water down consumer confidence even further than is currently the case, ensure that the public do not save enough for retirement and increase the savings gap even further, then we are surely going the right way about it.

So, how do we solve the greatest challenge of them all? By the delivery of accessible and affordable financial advice to consumers.

Perhaps we could dare to dream of a climate where financial advisers are in such demand that their phones never stop ringing. Where everyone must register with an adviser to ensure they can be looked after in the event of any change in life circumstances.

There will be so many bookings that people will have to wait a week or two for an appointment. All clients will come to see you in your office and tell you their symptoms, then you will give them a diagnosis and a remedy on the spot.

You may well have to refer them to a consultant or specialist if necessary or they may have see another of your colleagues for further tests or basic treatment.

The amount charged for the appointment is the same wherever you go and you know you are seeing an appropriately qualified adviser.

The adviser has to establish some basic information and completion of a fact-find in advance by the client will aid the diagnosis. The diagnosis is made on the basis of the information given and the prescription is the only documentation received. Nothing further follows unless you have been referred for specialist or follow-up advice until next time you need your adviser.

Of course, the prescription allows the client to go to any authorised adviser for fulfilment and wherever they go (tied, multi-tied or independent) the prices are the same.

The adviser can choose to operate in the national or private sector or a combination of the two. If operating in the national sector, they will receive an allowance per consumer registered to the practice. If private, they can charge fees as appropriate.

What novel name could we come up with for this service? How about the NFS – National Financial Service. Far fetched, perhaps. But is this what the Treasury really wants?


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