At the LIA Conference last May, I reported my disappointment at the lack of response to CP121 – less than 10 per cent of the firms affected.
Now 10 months on and I must confess to being consultation paper-weary and not having the time to respond from my own firm's perspective. So why is this and how can I be so hypocritical?
First, I would say that my lack of response is not one of preference but of necessity. If I spent the time needed to respond in an intelligent, well thought out and meaningful way, my business might not survive. That is the stark reality that faces many of us in the current climate. So if we cannot spend the time ourselves who do we turn to? We must rely on our professional (the LIA, Sofa, IFP) and trade associations (Aifa) to respond on our behalf and, where possible, make joint submissions in the areas where commonality exists. However, we still need to read the briefings they send out to us and respond to them with our views.
I am going to be contentious. There is an area where we let ourselves down badly. I have seen a myriad of rants and raves directed at individuals and organisations. With few exceptions these are ill thought out, irrational and emotionally charged. These responses win us no friends and perpetuate the illusion that many of us are ignorant dinosaurs only interested in ourselves.
As one example, take the response to the Consumers' Association campaign against misselling of endowments (and, for the record, I don't like the Standard letter either).
How many advisers or companies have taken the trouble to write in and explain the exact history behind some policies to promulgate an accurate understanding? Hardly any. But how many vitriolic letters have they received from so called professionally qualified advisers? Quite a few, by all accounts – all achieving the same result, casting doubt on our aim to become recognised as a profession.
So please do respond when you can to what is going on but do so with a reasoned, logical and professional approach.
Another huge challenge we advisers have is life off-ice administration. There have been many comments on this of late.
Take the endowment issue as an example. My firm, like many others, has received the standard Consumers' Association letters of complaint. So far, I am relieved to say that none of these relates to policies that my firm has arranged but all are for policies where we are the current servicing agent.
Life office systems are often so poor that they cannot identify the original adviser. As a result, we have to respond to all these, which costs time, money and resources.
Companies decide to discontinue certain products or funds because of their unprofitability but then we have to deal with all the enquiries and advise clients what to do outside their normal reviews. This can be very time-consuming and it is difficult to invoice clients for a situation that is not of their making.
But there are still some huge opportunities out there for all of us. Just look at the statistics:
One in three will develop some form of cancer.
The average currently paid entitlement from the state is only £73 per week.
Thousands of policyholders are still in high-charge contracts.
Two million homeowners have not reviewed their loans.
Markets are so low that there must be significant growth potential, many products offer downside protection.
Permanent health insurance There is eight times more likelihood of being ill and unable to work for six months or more than there is of dying during your working life.
Costs have tumbled in the last few years making re-broking attractive.
There are so many opportunities emanating from full financial planning reviews for new clients that we would be hard pressed to meet someone that we could not help.
Gavin Tisshaw is LIA president and chairman of Executive Advisory Services