Senior industry figures have little enthusiasm for the treating customers fairly initiative, according to attendees at a debate held by Watson Wyatt.
Over 30 senior executives from UK insurance companies and other financial services organisations attended the debate to vote on the proposition: “This house believes that the focus on new business sales is damaging to our industry and hence is detrimental to consumers.”
Prior to the debate 53% of the audience were in favour of the motion and 47% were against it, but after the debate the figures changed to 59% and 41% respectively.
Moreover, attendees showed little enthusiasm for the TCF initiative influencing the industry’s standing with consumers.
Just 30% said it would have a positive contribution, 48% said it would have neither a positive nor a negative contribution, and 22% said it would have an adverse impact.
Mike Williams, a senior strategy consultant at Watson Wyatt, says: “It is of considerable concern that so many in the industry remain sceptical about the TCF initiative. We held a debating forum in April 2005 where 46% of the audience believed that TCF would help to restore faith in the financial services industry. Experience over the intervening 18 months has, if anything, dampened this already limited enthusiasm.”
When asked about the extent to which a move towards fee-based remuneration would change consumer perception of the industry, 57% said there would be an improvement, 30% said there would be no real change and 13% said there would be deterioration.
In five years’ time, 17% of attendees said remuneration through up-front commission would be seen as acceptable for all product lines, 74% said it would be acceptable for some product lines and 9% said it would not be acceptable under any circumstances.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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