Mike Kindle’s letter in last week’s Money Marketing rang some bells with me.
As he says, we have to print out our own application forms, quotes, key features, etc, saving providers a lot of money. Technology has taken over our industry in the name of money saving, online submission of cases, online case tracking and telephone under-writing, very efficient, all designed to reduce expenses to the good of the consumer, our clients.
The FSA stick their nose in. Don’t invest too much in equities, too risky, must protect the consumer. Stakeholder pensions? Only 1 per cent fund charge, please, otherwise the consumer will suffer. So, what do we get?
Since all this paranoia started, returns to the consumer have gone down and down and down. Endowments? The Money Management survey in February shows that the main providers are now paying out less than 30 per cent of what they were paying in 1992 on a 25-year endowment.
During the years those policies were in force, we saw a huge stockmarket crash in the mid-1970s.
Pensions? A recent Money Mail article headline read, Pension payouts plummet. Why on earth would anyone recommend a pension unless the client is a higherrate taxpayer or the employer is paying? Let’s face it, higher-rate tax relief is on the way out.
Where has all the money saved by technology and regulation gone? Not to the consumer, that’s for sure. The RDR, we are told, will also be great for the consumer. As my children used to say when they were young: “Hmm, I wonder, itchy chin.”