My dad is totally fed up with the amount of paperwork he gets from his investments. The last time he...
My dad is totally fed up with the amount of paperwork he gets from his investments. The last time he had just been sent five copies of a fund report from HSBC for the grandchildren's investments,which, incidentally, are all in trackers. I finally managed to persuade him of the benefits of using a wrap, naturally Hargreaves Lansdown's own.
The providers generate so much literature that no one has a hope of ever being able to read it all.
In fact, if clients read everything a provider gave them, they'd probably never be able to make a decision. Most clients hoard boxes of paper without a clue what is important and what is not, then ask us to go through it all and sort out what they actually need and what they do not. The only provider that seems to have any sense is Foreign and Colonial. It marks the important bits 'Keep it'. What a refreshing attitude.
Most product literature is primarily designed to help advisers sell products, not to help the consumer buy. But as advisers, we should not presuppose everyone needs a product when planning our clients' financial strategies.
Does the product literature sell the benefits of the product sufficiently for a consumer to make a decision to buy on their own? Absolutely not. This is why direct mail literature looks so different from the packs we issue to clients face to face.
Partly, the volume of paper stems from good intentions of the regulator in Canary Wharf and its predecessors. However, provider marketing departments churn out volumes of useless documents in the vain hope this helps to shift product.
The regulatory aspect is that a client must be in a position to make a fully informed decision at the time of the purchase. This usually means a key features guide and an illustration as a minimum. Is anyone else a fan of key features guides? I think they are great in principle for a simple 'this is what you are buying, this is what it does, these are the risks'.
However, the system could be much better. How about a one-page summary of what a product does and why it may benefit you, the associated risks and so on, with how to get more detail if people want it, which they will not.
What advisers do not need are endless laminates on fund performance, glossy wrap-a-rounds and the like.
The essential piece of literature for me is the client's financial plan: the strategy of how the client should have their finances arranged to meet their objectives. Accompanying this is the suitability letter and explanation drawn up by the adviser.
Product literature can only go so far in explaining what a product does, and it does not do that very well. It is the suitability letter that provides the essential link between the clients present position, objectives, what is recommended and why this is beneficial to their strategy. This, combined with a simple one-page key features factsheet and illustration from a provider, are all you ever should need.
Danny Cox is head of individual advice, Hargreaves Lansdown
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected