I agree completely with Peter Hargreaves' assertion that life offices must change or die. Virtually all of them are so far behind the leading edge of the market that they will simply fade away as also-rans.
Here are a few examples of why. Most of the traditional life offices have:
Damaged themselves hugely by participating in the stakeholder fiasco. That damage will not simply disappear once the whole stupid 1 per cent thing has finally been consigned to the dustbin.
I will never forgive those life offices which unilaterally changed the terms of all the personal pension plans we wrote with them in the 1990s and made that element of our policy bank completely unprofitable for us to go anywhere near ever again (Norwich Union, Standard Life and Friends Provident, take note).
Finally woken up to the fact that everyone who has taken a good look at their unit-linked funds has found them dismally lacking by comparison with most of their unit trust counterparts.
Multi-fund is now the way forward but those now trying to get in on the race are about 15 years too late. What do I care about some bloke in Edinburgh telephoning me to try to generate interest in Scottish Widows' new multi-fund life and pension products? Not a jot.
Completely failed to support their (past) IFA supporters by keeping them properly informed of the material they are sending out to existing low-cost endowment policyholders. That places my business at risk of complaints that could otherwise be headed off by early contact with the client (Norwich Union – for one – take note).
Had to disband their direct salesforces and rebrand themselves as IFA-friendly. Now, there's a joke. Companies such as Britannic Assurance, the Co-op, Liverpool Vic and a good few others have in the past made virtually no effort to hide their total contempt for the IFA sector. Ever tried writing to a direct-sales office for details of an existing policy? Very hard going, isn't it? Yet now they expect us to welcome them with open arms.
Somebody from Liverpool Vic phoned me a few months back to try to get me interested in their with-profits bond but the commission on offer (with trail) was so inadequately uncompetitive that the conversation ended pretty quickly. Clearly, the actuaries at Liverpool Vic have no idea of what the IFA sector needs or wants. Most of us are not greedy but we need to make a living and pay the bills.
Allowed their admin to deteriorate to standards that set new record lows. I need hardly say anything at all about this as so much has already been written although I am convinced that a lot of it has to do with pensioning off all the older, experienced staff who had all the vitally important historical knowledge and replacing them with half-price kids just out of school who know virtually nothing.
Capital units? What are they? Actually, son, they are rather crucial to this review I am trying to carry out of a client's existing pension plan with your company.
It is rather wearisome, isn't it? I could go on but you get the picture. The world is a changing place and the dinosaurs are dying.