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Taking stakeholder to market

After being fea-red for so long and perceived as an assault on the sector,

some IFAs are starting to whisper that stakeholder is actually good for


Fountain Independent Financial Management business development Nikki James

is not alone in saying that her firm uses stakeholder in the corporate

market as a “Trojan horse”.

But those IFAs who do speak favourably about stakeholder also say that it

has necessitated a rethinking of how they market themselves.

Richard Schwartz Part-nership principal Richard Schwartz says the very

topicality of stakeholder can be harnessed successfully as a marketing

tool. His firm sends out agenda for seminars it holds as a “handholding

exercise” for employers about stakeholder. Any other issues raised by those

responding to the agenda are then dealt with by the IFA at the seminar,

with the intention of developing them into new business.

Schwartz says: “Things have moved on from viewing stakeholder as a

necessary evil to a good business opportunity. We see stakeholder as a

loss-leader and as a conduit to other business.”

Torquil Clark pensions development manager Tom McPhail says that so far

his firm has been happy just to identify new business opportunities but

says it is eventually looking to use stakeholder to cross-sell. He too does

not see stakeholder as necessarily bad for business. “It is

Government-propelled and makes people see advisers,” he says.

McPhail does, however, accept that many IFAs are still very nervous about

the impact of stakeholder. Nevertheless, he suggests: “If you are doing

well out of stakeholder, you are doing well in general.”

Not only advisers but the sharper providers too have been focusing on

marketing. Legal & General, for instance, has been using marketing

assistance as a means to market its proposition to IFAs.

L&G business communications manager Mike Smith says: “If we can help and

give IFAs a full toolkit, then the IFA gets the business and we are happy

too as it is a Legal & General stakeholder that is being sold.”

As part of this toolkit, IFAs are offered for free a variety of generic

marketing documents which can be tailored for specific targets or


The L&G “buffet” of marketing bumf is divided into information to direct

at employers, Smith advises should be seen as the client in the first

instance, and further material to supply to employees who are needed to

populate the scheme to make it a success.

While many IFAs are agreed that stakeholder success is dependant on using

it as a vehicle for lead generation, a difference also opens out into how

they wish to develop those leads.

Schwartz is typical of a new breed of IFA with a business geared to

corporate clients. While some IFAs would be happy to use the opportunity of

stakeholder to generate leads for future individual business, Schwartz

thinks it important to retain the corporate focus of his firm and is not

interested in diluting his core business. So the message would seem not to

follow up all leads willy-nilly.

Much is also developed out of audit checks of existing pension schemes.

Not only does this cement the relationship between client and adviser, with

the process allowing the adviser to shine, but employers often utilise the

interaction with the adviser to raise inquiries about the entire employee

benefits package they offer. This is an opportunity, says Schwartz, to

review the need to for group life or group critical illness cover.

Another option can be for the employer to stump up for individual tailored

advice for employees around stakeholder, such as fund allocation.

McPhail says the primary business that he would be looking to generate out

of stakeholder would be director pension planning and group risk. However,

unlike Schwartz, he would be interested in developing individual leads and

cross-selling products such as Isas.

Towry Law marketing director Mike Bowman says some companies are very

protective of their client base so there is little opportunity to market to


His firm has taken the strategic decision when selling stakeholder to rely

on fees so as not to rely on cross-selling, of which there is no guarantee.

He also recounts an experience shared with many other IFAs, and supported

by res-earch, of some SME employers being totally uninterested in

stakeholder. With those that are, his firm will seek to leverage off their

existing relationship and bring in their related arms of insurance and


With individual stakeholder, the sale can be a spin-off from other

business, usually spouses, children or grandchildren of high-net-worth

individuals. Sometimes, even these can be company directors who you come

into contact with as a result of meeting employers to discuss stakeholder,

says Bowman.

He goes so far as to predict that there will be a stakeholder season

comparable with the Isa season. Stakeholder, in particular the actual

designation process, can involve only a modicum of interaction with the

client but it is up to the adviser how much they can make of that encounter.


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