When I entered the recruitment profession in April 1987, the financial services industry had already...
When I entered the recruitment profession in April 1987, the financial services industry had already started to pick up pace.
The Financial Services Act had been passed in the previous year and the antics of Barlow Clowes was still ringing in our ears. UK Provident had already bitten the dust and was undoubtedly a sign of things to come.
The independent financial adviser had already started to make a discernible difference to the mass market and Fimbra had become more active.
Previously the vast majority had been serviced by the friendly face of the 'Man from the Pru' on his bicycle and other such industrial branch companies collecting shillings for funeral arrangements.
Real advice on matters financial was left up to the 'city stockbrokers' in their pinstriped suits, braces and spotted ties. That, however, all changed and home ownership gave a massive boost to the sector.
Any adviser worth their salt latched on to the idea that maybe a client who bought their high commission paying endowment, would also like to buy a pension and all other types of investment and protection.
This was further assisted by the forever changing pension legislation, tax breaks and new investment products.
As a consequence, life companies started to recruit more and more 'life inspectors'.
I have always considered this a peculiar term and had visions of officials driving up and down the country inspecting bodies for signs of life.
The life inspector originally had the authority to underwrite an individual's life.
Ray Galbally, who is currently an independent financial advisor at Rosemount IFA in Gidea Park, Essex, said: "up until the mid-eighties Sun Life instructed their inspectors to use a tape measure to gain their client's height and they were subsequently to be weighed on the family scales in order to provide an initial life assurance cover note".
These Life Inspectors were the only people a broker would meet from the companies.
However, some of these fellows were no more than proposal collectors and with one particular life company there was a famous standard joke for the so-called 'wheel barrow', which inferred no actual selling was involved merely collecting of orders. In 1988 Life Inspectors were converted into real intermediary sales people.
During this period the fashionable name of 'Broker Consultant' filtered in to gradually replace this old title. Post FSA it was no longer possible to underwrite a life and therefore had no real significance.
Nevertheless, the role was essentially the same and IFAs still had to meet an entourage of calling sales people.
Following the stockmarket crash of October 1987, along with the removal of double Miras in August 1988, the housing market over heated and we witnessed a dramatic reduction in mortgage business and their related products.
The economy reached a cyclical low and the brokers now needed something different. Collecting proposals and a friendly chat were no longer adding value. The companies required new ideas, new products and real business assistance.
The IFA had been dramatically effected by the new compliance rules and in cases where their personal wealth was invested in properties, had in some instances fallen into negative equity. This resulted in the removal of traders' licences. Subsequently, they ran for cover under the umbrella of either a life company tied agent or became a network member. Response to the forever demanding IFA arrived in different forms.
In 1988, a group of 12 life companies, including household names such as Standard Life and Norwich Union along with the now defunct names of Life Association of Scotland and Crusader Insurance, signed an agreement call Camifa.
Similar to the campaign for Real Ale this was a Campaign for Independent Financial Advice. The Camifa agreement only lasted until the early nineties when they started breaking ranks and setting up their own direct sales division.
A more positive and longer lasting answer came in the form of diversification into new product areas with a greater business focus.
In 1987, the Personal Equity Plan was established and gave the IFA a whole new insight into the money markets. Previously Unit Trusts and Investment Trusts, which had been in use by stockbrokers for many years, were considered too risky.
They usually sold bonds and protection-linked savings. Although the PEP was still indeed exposed to the vagaries of the FTSE, Dow Jones and Nikkei this was promoted as a wonderful tax free saving opportunity.
Everybody likes to receive something for free. Peter Row of Maurice Herbert IFA in Chelmsford, Essex said "one of the first investment houses to sell investments to the IFA was Fidelity."
Fidelity, like many of the investment houses, followed suit offering a much greater choice of funds and investment vehicles than the life offices.
Life companies also recognised the merits of providing technical assistance and sales ideas by more qualified consultants. This was usually driven by the companies' strengths in areas such as corporate pensions, but also went on to include protection, mortgages and investments. Other new areas included, commercial and domestic mortgages, healthcare and traded endowments where major players like Bupa and the building societies were coming into the IFA arena.
In recruitment terms the consultants that recruited for organisations selling to the IFA channels were in constant demand. Each group was trying to gain a greater market share and the need for the best possible staff available.
An IFA today can simply switch on their computer and gain access to performance statistics over any period, charge structures and product flexibility.
They meet with far fewer sales representatives than ever before. Competition has never been so intense and a quality IFA sales person is alwa
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