Once again, our industry has been afflicted with a well-meaning report from an intellectual who does not appear to understand the complexity of human nature.
We are now told that what the industry needs is a new batch of low-cost products capped at 1 per cent which the consumer can understand and a miracle will occur.
The consumer will break down our doors in the stampede to buy these products. Consumer inertia and apathy will be overcome at a stroke by these super new products, just like they did with stakeholder – hold on, isn't stakeholder only purchased by the well-off for their children and grandchildren?
Oh never mind. This time, the consumer will buy the products because they are so attractive. And the providers? Well, they can eventually make a profit in about 10 years or so (if they are still in business) – that should incentivise them and if it does not, we can always promise their chief executives a knighthood.
What of the advisers, many of whom are now far too qualified to be of any use with these super new products? Let them charge a sale-contingent fee, even though there is no leeway within the 1 per cent charge for this option.
The new products do not allow for the payment of advice because none is needed. Nor will they need to be marketed because they will sell themselves.
Is this really happening? What planet does Mr. Sandier and his boss Mr. Brown live on? When will some common sense sink in? Sadly, only when they have completely decimated our industry, only when all the good people have become disillusioned and left and only when the savings gap has increased by a further considerable amount.
Please try again, Mr. Sandier or Mr. Brown or whoever is next in line but this time try to offer incentives such as tax breaks or pension credits to reward consumers for making private provision.
Allow providers to make a reasonable profit without this ridiculous 1 per cent cap and even allow the advisers to be paid for all their hard work by way of an adviser's fee included within the product (that is commission to you).
If this happened, then the Government would do more to close the savings gap and avert the disaster that awaits us in the not too distant future than anything they have thought up so far.
Oh and by the way, if Mr Sandier still thinks that 1 per cent is enough, let him try dealing with the admin department of any of our leading providers and he will see what cost-cutting has spawned – inefficiency, unacceptable delays, lack of knowledge and a general apathy. Still, if you pay peanuts you should not be surprised if you get monkeys.
Investors Planning Associates,