Fortunately, help from the product providers was at hand. The so-called Group of 13, which later become Camifa and then IFA Promotion, was a group of 13 life offices which joined together to promote independent advice. Another group of companies also formed Imag – the Independent Marketing Assistance Group – to provide support services for small IF As struggling with the intricacies of joining Fimbra.
There was also a sign of things to come when Porch ester Group formed links with Cornhill to launch a joint-venture life office, an early hint of its ambitions, which it followed through with its acquisition of Merchant Investors later in the year. Fimbra revealed it had sealed a deal with Pointon york Vos to provide a professional indemnity scheme for the SRO’s members.
The SIB draft rules were out in February, and a West Country intermediary, Colin Cochrane, tried to persuade the OFT that the draft rulebook was anti-competitive because it would close small IFA firms. And April saw the launch of Andrew Paddick’s Institute of Insurance Brokers.
The March Budget brought increased competition for the AVC market, as Chancellor Nigel Lawson announced plans to allow occupation pension plan members to buy an AVC from the supplier of their choice. It was also looking unlikely that the industry would not meet its deadline of late 1987 for P-Day – the day by which IFAs would have to submit their application to join an SRO.
It was clear that most of the big banks and building societies would be going direct to SIB for authorisation but there was some cheer for independent supporters when National Westminster Bank said it would be operating its branches as independents.
Abbey Life launched its Living Assurance offering traditional life insurance cover and permanent health insurance in one package – the first mass-marketed critical illness product in the UK In July, Friends’ Provident became the first large mutual office to announce it would be setting up an appointed representatives network. A month later, it announced a tie with Abbey National, opening the floodgates to a stream of similar life office deals.
Everyone laughed in July when the Insurance Brokers’ Registration Council said it wanted to become a Recognised Professional Body. By November, however, the IBRC had overcome DTI opposition to win RPB status and silenced its critics. And P-Day was rumoured to be January 1 next year, with the Financial Services Act regime in force by April.
The impact of October 19 stockmarket crash is hard to exaggerate, especially on top of the previous week’s storms which uprooted trees allover the country and blocked roads. The stockmarket crash was sparked by a 23 per cent plunge on Wall Street. The UK market followed suit, dropping 250 points, a record one-day fall.
There was one more shock for the industry before Christmas. In November, London Life announce that the crash had dealt a blow to its financial solvency and said it would axe 108 of its 1,000 staff and close six branches. We also heard news of a major London IFA firm whose chairman had plans to link with a big international bank to create a joint-venture unit trust company. The IF A firm was The Levitt Group and its chairman was Roger Levitt.