Peter Sprung, director of
six-person IFA Citadel Financial Services,
taking over as
president of the Life Insurance Association from
Steve Horswell from May 4.
In an interview with Tracey Boles, he sets out his aims for his year in
office and explains the LIA's controversial submission
What will you be tackling in your presidential year?
The biggest issue that faces the financial adviser today is education. We
know consumers and the Government want it. But there are no systems or
educational structures in place.
We want to take advisers from the benchmark up to Advanced FPC and beyond
and we will put the means in to do this. We want to have educational
centres throughout the UK so that any adviser will not have to travel more
than 50 miles to get expert tuition from professionally qualified tutors.
We have set the wheels in motion. We are applying to the European social
fund for 1m, which will meet 45 per cent of student costs. As an
association, we will be seeking sponsorship from product providers. We
expect to run at least 34 different centres but it depends on supply and
Our educational prog^_ramme, the
Pinnacle programme, will be launched
in May. It will be the embryonic version of a national system. We are going
to ask members if they aspire to studying for an exam, which is free to
them, and hope to get 5,000 on board but it will not be prescriptive. A
straw poll of our members showed that 25 per cent are interested –
equivalent to 6,500.
Why is education key?
Education should address two
issues – consumer protection, which is
foremost in our minds, and advi-ser competence.
The LIA mission statement is to increase the competence, standing and
success of all members. Consumer confidence has been adversely affected by
the national press who publicise the 2 per cent of bad cases.
If we can promote the educational side and put our own house in order,
then consumer confidence will follow and remove the need for prescriptive
exams. That is the issue for this year. All other issues have been battered
to death. There is no real future in constantly revisiting them.
How are you preparing
Our major concern is soc^_ial exclusion in the low-charge regime. If there
is no provision for advice in the 1 per cent charge, the likelihood is that
people who cannot afford it, will not get any.
The first thing IFAs will have to decide is whether to take part. If they
do then stakeholder cannot be implemented without advice. Caring employers
may be willing to pay a one-off fee and annual retainers for advice. But it
may be difficult to get some employers to pay for advice and others might
stamp it on their employees. We fear for consumers as we want them
benefit from quality advice.
If IFAs do partake, we will take up the issue of advice with the FSA of
whether stakeholder will be sold by direct offer or with the full advisory
We think advisers should decide any fee on stakeholder. But there may not
be enough of them to implement systems by the deadline of October 2001
which could drive up costs. Supply and demand could apply again. Therefore
the 1 per cent charge could inadvert^_ently create higher charges.
What else are you lobbying for?
Polarisation, charges for complaints, compensation schemes and
Can you outline the LIA's
stance on polarisation?
Polarisation has with us for 10 years and has served its purpose. The
public recognise the difference between inde^_pendence and tied agents. We
favour maintaining polarisation but want to bring an issue into the
debate. Where an insurer does not have a product it can enter into a
contract to sell anther companies. This is white labelling. It happens now,
it always has done and we believe it should do in future.
Are members still leaving as
a result of your submission
polarisation to the FSA?
Yes, one or two.
Is there room for more
than one association?
Aifa represents corporate bodies while we represent individuals. We
comp^_lement each other. We deal more with education. In the long term, the
objective of all organisations must be to have one association
rep^_resenting all advisers. We have been having a lot of discussions. Our
door is always open.
Is there a conflict in having both tied and independent members?
You can never be all things to all
people. Some decisions make people
unhappy. One should not gain at the expense of the other.