Back in the 1970s, we read books such as How I Raised Myself From Failure to Success. This was written by one Frank Bettger, a sportsman turned insurance salesman. He stated that people always proffered the most plausible reason first when asked why they were doing or not doing something.
You should pause then ask what is the real reason. I have used my own version of this for some 30 years and it works. This area of fact-finding leads naturally to life planning and the recent conference run by the life planning groundbreaker George Kinder.
I attended George’s two-day course and benefited greatly. When time is not at a premium, I have promised that I will take part in his five-day course, too, pref- erably when it is in Hawaii.
Asking deeper questions avoids the problems that come from not really knowing enough about a client but it can also carry risks if we find ourselves going too deep.
The recent report by the FSA on pensions consolidation is well worth a read although I do wonder if the author has ever given advice.
Consolidation for asset management does not score highly yet what client on a CAR basis would agree to the actual cost of collation and rebalancing, especially where there are more than six plans currently in force.
It also fails to address the question of guaranteed annuities, where the bonus rate is likely to remain at zero for some years, given the current asset mix or indeed lack of it.
The report also talks of the changes being made to suit the admin requirements of the adviser. If the adviser is fee based, any reduction in admin will directly benefit the client. Costs may rise but they will not exceed the costs currently being encountered.
One other glaring omission in the report is the fact that some people may seek to spread their investments, given recent market problems. This will make little financial sense but may help them feel far more secure.
Advice is about more than the numbers, it is about what people feel most comfortable with. As long as this is not hugely detrimental, is that not what is important.
In short, this template is a good start but it is not the whole answer and I am sure that the FSA would agree with that. What we need is a more informed debate and an end to transfers into Sipps, where the same fund or family of funds is at use at either end.
In a recent issue of Money Marketing, some rather outrageous comments were made by someone I have never even met.
It is always regrettable when someone takes something out of context and does not read the entire column. That lack of attention to detail is at the very root of her problems. If we end up with a less than level playing field, then the FSA will not succeed in its step change.
This is regrettable but, given the history of some of the players, hardly surprising. Nic Cicutti was correct, not in all his comment but in his conclusion that some will always seek the easiest way to comply.
It is those same individuals who will ultimately be kicked out of the sector and, not before time, all the nonsense of untested experience finally put to one side. After all, with that mentality, TCF must be the real barrier for them and one they cannot limbo under.
Rob Reid is managing director of Syndaxi Chartered Financial Planners