The managing director of Lifesearch Tom Baigrie has a particular bugbear – execution-only protection sales.
His argument runs that some of the biggest marketing budgets on the planet – namely the supermarkets – are putting across the message that protection is a commodity product. But Baigrie is adamant that it is no such thing.
“I want to challenge the concept that a layperson can make the right decisions in protecting their family when they do not know what the initials FIB stand for. If you have never heard of family income benefit, how can you decide how to protect your family?” As part of his case, Baigrie says half of Lifesearch's customers change the type of cover they are seeking.
He believes it is only a matter of time before regulation forces the issue. “I expect the arrival of the ombudsman in the protection market to cause grave trouble.” He thinks that the ombudsman and the FSA will initially find themselves dealing with misadvised sales but Parliament and the Treasury will increasingly take flak for problems on the execution side.
“After a while, the Treasury and Parliament will have to listen to the complaints and execution-only will be shown up for the very flawed purchasing route it is.”
But for now, he believes that execution-only sales will take a growing share of a growing market.
“Like all relatively new markets, it has not yet been found out because when you are young you can get away with things,” Baigrie says ruefully.
However, he believes that Lifesearch may be the answer to the execution-only onslaught. “The huge benefit of Lifesearch is it shows the way the advisory sector can compete head-on with the execution-only sector. The aim is to be the country's foremost adviser on protection products for low-cost delivery of high quality advice.”
Although he believes that both tied and multi-tied advisers are much better than non-advised buying, he also considers there will be room for a mass-market independent in the protection market. He says Lifesearch will stay independent unless the market forces its hand.
Although Lifesearch is controversial with some of Baigrie's IFA peers who believe it cannot offer proper advice through its combination of internet and phone advice, he believes his customer-focused approach will meet any future requirements from the ombudsman. “I am confident that if a complaint to the ombudsman should arise in five years time, he would say that is a good job done and that is a very high standard to reach.”
He brandishes a three-inch-thick pile of customer satisfaction forms. The company brochure says that by last year it had sold around 50,000 policies and had received 5,000 positive feedback forms.
The group, which includes the original IFA Baigrie Davis fee-based and employee benefits practices, comprises 124 staff and 50 advisers across two offices in Milton Keynes and the City of London.
He says the business is not so big yet that he does not know everyone's name. His managers on both the advice and service sides have been internally appointed and trained by him so he has either trained or trained the trainers of everyone in the company. He says this helps maintain the company ethos of trying to make sure that all the staff are able to put themselves in the customer's shoes.
Baigrie moved to the UK from South Africa in 1981, pursuing a career in insurance sales to make some money with Merchant Investors – not, he emphasises, the MI group.
The realisation that you could not give proper advice as a tied salesman saw him set up as an IFA before they came into regulatory existence.
The inspiration for Lifesearch was realising that a protection and critical-illness sale he made to a family in Birmingham where the wage-earning wife died was the best bit of advice he had ever given.
When asked if he considers himself an entrepreneur, he agrees but with a qualification. “It can be seen as having celeb status but it is just a self-employed businessman having an idea. I am an entrepreneur if you accept that my profit comes from customer focus.”
In conversation, Baigrie appears to be aware of the need to rein in his own enthusiasm although he will speak his mind.
When Prudential refused to honour its pipeline business for critical-illness cover, Baigrie was one of those complaining the loudest and longest. “I had no choice but to fight for my customers' rights.”
He believes that the relationship with product providers will change eventually and that when power switches to retailers it will bring the market more in tune with customers and that may bring better products.
“A new product should have incentives to loyalty and flexibility to stop the ridiculous situation where the same life can be rebroked four times in a year for tiny savings in premium.”
He welcomes the onset of regulation for protection, believing that Lifesearch is already geared up but once again he returns to a warning about costs falling on the advice side to the advantage of direct sellers.
“Regulation in the short term is a good thing and certainly long overdue in the market. In the long term, the regulator must address the issue that their costs only fall on one part of the sector. The other part they are not charging the costs to is the part that is not as good for the customer.”
Baigrie says his task is to convince people and particularly the national media that protection, unlike investment, is “straightforward enough to get right but not to buy without advice”. As part of this task, Lifesearch is planning to trial an advertising campaign that aims to promote the advice not the product. Many will be watching with interest.
Lives: Wandsworth, South London
Born: 1961 South Africa
Education: Bishops School South Africa
Career: Two years in the South African army, came to UK in 1981, joined Merchant Investors, Started Baigrie Associates in 1984 joining with Arthur Davis in 1987, set up Lifesearch in 1998.
Career ambition: “To help lead the resurgence of advice as the acknowledged best method of purchasing financial products.”
Life ambition: “That my children outlive me and to remain married to the same woman all my life.”
Likes: “My family and cigars though the two don't go together. Honesty. Those who can see both sides of the argument and accept the other man's perspective as having equal validity to their own.”
Dislikes: “Economy with the truth, particularly in marketing information to persuade gullible customers.”
Heroes: “I am South African so Nelson Mandela is the obvious hero being able to see both points of view. He spend 25 years in jail and still saw that the other person wasn't entirely devoid of humanity, and FW De Klerk as the only leader who gave up power without a sort of armed struggle of any seriousness forcing him to do it.”
Transport: Triumph Tiger motorcycle