The shock did not end there, with chief executive lain Lumsden stepping down to make way for Standard Life Investments chief executive Sandy Crombie.
Despite the turn of events, many IFAs have continued to back the provider believing that demutualisation, while limiting consumer choice, would not threaten Standard’s ongoing viability.
In the weeks that followed Standard moved to bring in new charges on its with-profits business and fend off attacks from the likes of Treasury Select Committee chairman John McFall, who suggested it had not been completely honest with policyholders in a website statement suggesting the pending mutuality discussions would have no effect on policyholders.
Standard’s annual general meeting in April saw the insurer hit the headlines once again and Crombie being forced to defend his record and job, while affirming his commitment to take the business through to a demutualisation vote.
The criticism kept coming, with Axa chief executive Henri de Castries also getting in on the act in June, saying Standard had effectively “killed itself’ by relying too heavily on with-profits and Axa would not be interested in buying it.
On a more positive note, Standard introduced its single-premium bond platform and in July it still led the pensions market, despite the turbulent headlines earlier in the year.
Also front page news was the proposed merger of Berkeley Berry Birch and Inter-Alliance. BBB’s decision to wind up its national IFA firm Berry Birch & Noble Financial Services and “dump” its liabilities on the Financial Services Compensation Scheme was an unpopular choice with many IFAs. BBNFS retired founding director Derek Berry, along with Sesame, criticised the FSA for allowing it to go ahead.
As the story unfolded, the FSA did warn BBB chairman and chief executive Cliff Lockyer that his director status could be in question if the transferring of assets out of BBNFS did not leave enough assets to cover its expected liabilities.
But in April the FSA went further, blocking BBBs plans to dump the liabilities. Then in May Money Marketing revealed talks between BBB and Inter-Alliance had officially broken down. Lockyer and Inter-Alliance chairman Keith Carby attributed the break down to a failure to agree on price and structure of a deal and not any clash in personalities.
It did not take long, however, for Inter-Alliance to be back in the headlines reigniting talks with Millfield, after breaking down in 2003. This time the path was smoother and Inter Alliance and Millfield merged in a reverse takeover to become the biggest national IFA in August.
While Inter-Alliance was the headline act in the merger and acquisition front, there was plenty more action. Corporate pension IFA Alexander Forbes Financial bought the Annuity Bureau and its three sister companies; DBS bought London IFA Scott Goodman Harris; John Scott & Partners scooped up Bradford & Bingley subsidiaries Charcol Holden Meehan and Charcol Aitchison & Colgrave; The Exchange was put up for sale by Marlborough Stirling and Charcol was bought out by founder John Garfield from Bradford & Bingley, to name a few.
Then after much courting, Banco Santander acquired Abbey for £8.7bn and Aegon merged its five IFAfirms to form Origen.
Speaking of mergers, the move to create one industry body from the LIA and Sofa was not without its own problems. A Money Marketing online survey showed that while LIA members were in favour of the move, Sofa members were split on whether or not it was a good idea. The new Personal Finance Society’s creation also involved secret crisis talks with former LIA presidents to try and iron out their concerns, before both organisations eventually voted in favour of the move and the society came into being.
David Aaron was banned from being an IFA in September and he still maintains he was not treated fairly by either the FSA or the FOS. On the personality front, “menu master” Paul Smee hit the front page in September when he gave up his role as Aifa’s first director general to become chief executive of the Association of Payment Clearing Services.
The appointment of FSA head of retail investment policy David Severn as new Aifa chief ruffled some feathers due to the fact that IFAs had been barred from applying for the top job.
Abbey protection guru Nick Kirwan also made the big move, leaving Scottish Provident behind to head up protection at Scottish Widows.
IFAs were kept on their toes with concerns over VAT treatment of network member charges, the professional indemnity insurance crisis and the IFA compensation levy. The debate over pension simplification also continued to rage on.
Rounding off the year, the industry waved hello to mortgage regulation and said goodbye to polarisation after years of discussion and much debate over how successful the multi-tied model would be and who was tying with whom.
But the award for best human interest story to hit Money Marketing’s front pages in 2004 has to go to the Havant adviser who thwarted a family of evil conmen known as the Brazil Gang who went about preying on the elderly and disabled.
Berry Birch & Noble Financial Planning adviser David Rackham made the front page when he spotted thousands of pounds disappearing from a client’s account and in his best Sherlock Holmes impression tracked the payments to a bogus address.
And you thought PI stood for professional indemnity.