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Research reward

I wonder if anyone has ever assessed whether there is more research undertaken in financial services than other industries. There seems to be reams of new research to wade through every week.

ABN AMRO and the FT look at what is an ideal financial product, what will be the impact of UK Reits, how many fee-based IFAs will there be in five years and how much tax is overpaid by consumers. This is just a collection of this week’s research reports I have read.

Two new research reports caught my eye. Why? I believe the most useful research comes from the better companies or individuals that really understand the needs of manufacturers, distributors and consumers. The two sets of separate findings were issued by Tillinghast and Higham Dunnett Shaw. You may not of heard of both of these companies as they are high-profile and do not have “celebrities” that are regularly quoted in the press.

I speak regularly to re-assurers, actuaries and technical experts. Often, they have more insight into the workings and future of financial services than the high-profile spokespeople.

In reality, the leaders of the quality businesses are too busy running their businesses to build a press profile. Where is Alaistair Lyons from NPI, NatWest and Sesame these days? Chairman of Higham Dunnett Shaw – that’s where. Who won the 2005 finance award from the CBI and is a long-standing council member of the Pensions Management Institute? Jocelyn Blackwell, CEO of Higham Dunnett Shaw. As for Tillinghast-Towers Perrin, they employ some of the brightest financial services people I have met.

Tillinghast concludes that “a cultural change is needed whereby the current sell and move on approach is replaced by a regular and on going advisory service”. The Higham Dunnett Shaw research states that product providers believe that customer retention has become a big issue.

Providers are now, for the first time, implementing client retention programmes.

Many companies at a maturity, surrender or transfer of an investment do not ask the customer the questions, would you like us to cont-inue managing your money and can we provide you with product information of our available choices of invest-ments? If not, why not? All information received should be collected and acted upon to improve client handling processes.

In IFA world, clients of mine would cash in part of their portfolios directly with the provider if they wanted to, for example, sail around the world, buy a holiday home or even a new wardrobe of clothes, handbags and shoes. When I was notified of the instruction to encash by the provider, I would contact the customer and ask why they did not approach me first to ensure they were asking for their money back in the most sensible, tax-efficient way.

“I don’t want to hurt your feelings as you recommended I invested in the policy or fund” or “I’m embarrassed that I’ve changed my mind about how I want to live my life from when you first compiled my financial plan.” This is just one area where providers need to communicate clearly with advisers and customers before mistakes are made.

When financial services is criticised by regulators or the press, we should remember that over 90 per cent of British households use financial services products. The actuaries, re-insurers and techies may not make it to top of the tables for publicity but they make the wheels turn round within the industry.

Even the people working in financial services appear happy with ORC International’s report – Putting It In Perspective – highlighting that 73 per cent of employees working in the UK financial sector consider themselves to be satisfied with their working environment. This is 6 per cent higher than the UK norm of 67 per cent and is the most favourable score across all UK sectors.

Let us build upon the positives, listen to the experts and continue to treat customers fairly.

Kim North (kim@techand is a director at Technology & Technical


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