In response to the Government's disposition towards financial products with little or no profitability for the distributors, perhaps the readers of Money Marketing would be interested in the following letter which I have sent to the Chancellor of the Exchequer.
I wonder if the Chancellor and the great and good at the Treasury really have any understanding of the distribution of financial products.
We all know that IFAs have to be technicians with regard to the integration of financial products into a client's situation and low-cost, low-profit products distributed by low-paid, poorly trained individuals will simply not achieve a satisfactory result.
Dear Mr Brown
I write regarding current Government policy on the distribution of financial products.
With over 20 years experience in retail financial services, it is my opinion that Government policy is having very severe negative effects – quite the reverse of that intended.
For example, in the last few years we have seen the demise of the following salesforces in their totality:
Sun Life Financial of Canada.
The numbers involved are in the many thousands. Many of these people had been managing systematic savings programmes for loyal clients over a period of decades, often in the lower socio-economic groups – the very audience that the Government says it wants to distribute financial products to.
Of the above companies,I had personal experience of Sun Life Financial of Canada, with which I worked for three years in the early 1980s. They threw in the towel in the UK in the light of this Government's policies. However, they continue to trade very successfully in numerous territories overseas.
As the Government is dependent on adequate distribution volume for financial products for the savings gap to be closed, perhaps I could ask you to kindly comment on how the Government's policy of wiping out profitability in the distribution channels is assisting the distribution of financial products to those who need them most.
Thanking you in anticipation.
The Harvest Partnership