I remember a long discussion about conflicts of interest following an Institute of Directors course for non-executives which I attended as a director of Sofa. We were wrestling with a phrase or series of phrases to illustrate or, better still, define what constituted a conflict of interest. One sage took it upon himself to state the best way to avoid a conflict of interest is not to have one.
The discussions about providers possibly delivering impartial advice made me recall the discussion over conflicts of interest. Clearly, those suggesting that providers had a role are yet to enter the moral maze that is managing or, better still, avoiding conflicts.
But worse than that, some see this as a call centre service. Given the dreadful advice inflicted on many buying annuities this way, whoever puts this forward can’t see the people for the pounds.
We do, however, need to avoid assuming that face-to-face is the only way forward. After all, this is new territory and it needs new thinking, such as presenting to affinity groups and integrating with other media to provide a collective approach.
This all needs a way forward that recognises the value of advice. And I am not talking about a simplistic scale of fees, especially one with no geographic adjustment.
We need to reverse engineer here and determine what is needed to deliver a low-cost service that will not attract the wrath of the Financial Ombudsman Service.
In a recent presentation, I finished off with a slide on the proposed changes from the Budget. Several enquired about the tax back home working with the regime here.
I think the tax will be withholding and when you consider double taxation, few treaties will include using withholding taxes as an offset. As such, double taxation in its worst sense could take hold.
We then moved on to longevity or, as more normally stated, trying not to outlive your money. Webb has suggested a simple determination for longevity and once again made me wish he knew when to keep quiet. What we need is the detail, not self-indulgent sound bites.
At the presentation I suggested it was simple. Should you wish to avoid running out of cash, take the current date away from your date of death and you have the longevity question answered.
One member suggested I was being flippant. No, I countered, I was simply underlining that what looks simple is often highly complex.
It is only when you think about all the moving parts that need to be considered that you realise that even if products were simpler its life that makes things complex.
One other example of conflict that still makes me smile; in playing football for the Boys Brigade, my fellow full back had enquired of my plans for the night. I explained I had a first date with a young lady.
He then took on the part of mentor, coaching me in what he saw was essential in the art of seduction. When I arrived to collect the said girl he (my fellow full back) was the one who answered my knock on the door. To say he was conflicted was putting it mildly. One person’s conflict is all too often another’s opportunity.
Robert Reid is managing director at Syndaxi Chartered Financial Planners