There are a few ingrained attitudes among manufacturers and distributors that make me want to sit on my hands and bite my lip when aired in meetings. Recently, I have asked a number of marketing and PR departments to tell me what their strategy is to make IFAs take notice of their products or services. It seems a perfectly reasonable question. “We take them out and get them p*****d” is not an unusual response, let me tell you. What sort of strategy is this?
The IFA community may be thought of by some as a cottage industry and, admittedly, it can be difficult to make IFAs change their behaviour but is the only answer to offer alcoholic inducements? Isn’t this a patronising way to treat what are often successful entrepreneurial businesspeople? What does it say about what the providers believe about their own products? Surely they should be relying on the intellect of IFAs to understand the products and then raise their sales?
Old-school advisers may well want to while away the hours over a pint or two but the successful modern adviser prefers to be communicated with in a professional manner, using methods that suit their business. In short, I recommend that the intellect of IFAs is not underestimated.
The FSA and its predecessors have over the years tried to make the indirect benefit rules reasonable. The conduct of business rules mention the provision of sales and information seminars, technology, training and the like but make no mention of the type or level of hospitality that should be offered. What prevents the companies with deeper pockets buying business by supplying gallons of beer?
The financial services industry is not unique in being somewhat dependent on forging relationships between manufacturer and distributor over a bar. The health and beauty industry, regulated by the Medicines and Healthcare products Regulatory Agency since October 2005, has said that hospitality is strictly limited to main educational purposes. This has resulted in the choice of more sober environments for business meetings.
Product providers, on the other hand, spend millions of pounds developing products and services based on a new raft of legislation such as Ucits III or on a need to fill a product gap without significant input from distributors telling them what they and their clients want. The standard retort goes something like this: “We have conducted quantative research with four groups of advisers while providing refreshments. Our research indicates the product will be a success.” How shortsighted and foolhardy is this?
We need more groups of people from across the industry to come together to discuss moving products and services forward in a formal setting. There have been a few successes in the technology sector where users meet with the developers to ensure what gets taken to market is fit for purpose. I struggle to name other groups that adopt this approach to looking at the future but new, innovative products and services taken to market really are the ones sought by IFAs and clients.
Finserv is a truly influential chat space for IFAs where questions such as “What do other IFAs think about named companies or products?” are raised and knowledgeable answers provided. It appears to me that based on the massive success of www.myspace.com and www.youtube.com, now is the time to embrace new technology, allowing us to communicate online at the time we want, spend time with our families and be able to work when we are moving around or drinking in our local trendy coffee bar. Come on providers and distributors – let’s talk to one another properly and soberly to get the right answers.
Kim North (kim@techand tech.co.uk) is a director at Technology & Technical