Have you ever managed to get really annoyed with someone that you have never met?
Last week I was sitting on a plane waiting to fly back home to Edinburgh after a tough couple of days of meetings, IFA seminars and journalist briefings. When you really, desperately want to go home, an hour sitting on a domestic flight can feel like an eternity and I often wish that someone would invent a Star Trek style transporter so that I could "beam" back to Scotland in a nano second. Of course on this occasion it felt worse because we were delayed.
The aircraft hadn't gone technical, nor had there been a late arrival of the inbound aircraft, which are the usual excuses. No, someone had decided to check in for the flight, deposit bags for the hold and then had managed to completely disappear into a black hole. As I sat and waited the gate staff were making "last and final" calls (why "last and final" whilst we are on the subject - why not just last call?) as they desperately tried to find the missing passenger who had probably not actually disappeared into a black hole but had been lured to one of the many retail establishments within Terminal Five. Minutes later the captain came on to the speaker to let us know that as a result of this unknown person's shopping habits, or perhaps drinking habits, as I suppose they could have lost track of time in one of the terminal’s brand new watering holes, we would have to find and offload their bags and therefore would be delayed for at least 20 minutes.
At this point I had developed a very strong dislike for this individual who I would probably never meet. I was reminded that earlier in the week I had experienced similar feelings about another group of people, compliance people; especially those from other companies who again I was very unlikely to ever meet. The reason I had become annoyed with nameless and faceless compliance people was because of what was said on the seminars I had been involved with over the last few days.
As usual in the face of fierce price competition, much of Bright Grey's marketing effort goes into giving advisers ideas about adding real value through advice. For example selling two single life covers instead of a joint life cover - which will often be only a few pennies more per month but which could ultimately result in double the pay out. We also talk a great deal about our added value service "Helping Hand" which we offer in conjunction with RED ARC. The ideas always go down really well and the feedback I was getting was all positive.
But there was one issue that kept coming up. "These ideas are all very well", advisers were saying. "But our compliance people insist that we sell the cheapest product. Once we start adding all these little bits of cover together we cannot prove that each cover is the cheapest available and therefore we only sell single benefits on price." I have heard this on several occasions recently and my initial thoughts were that the compliance person, locked away in some dark room in a head office somewhere, is actually preventing their advisers from giving proper advice by insisting that only price matters. Maybe this is part of the reason why we as an industry are locked in a price war that defies economic theory. We must be the only industry in the UK that has seen demand for its products fall at the same time as the prices have become cheaper than they have ever been. Of course cheap rates can mean better value for the consumer - but they also mean lower revenues for advisers. And it is always very easy to demonstrate how the headline price is not quite as good value as it might first appear - just refer back to the two singles instead of a joint policy argument.
But I wonder whether that actually is the message that these compliance people are putting out to their advisers. There is nothing that I can see in the FSA rules that says that you can only sell the cheapest. It is all about a fair and relevant solution for each customer. If that means that they can buy a product that has built in RED ARC Helping Hand cover for a few extra pence a month than the cheap vanilla product, then that is easily justifiable and I cannot believe that any compliance person would really disagree with that. So is it the compliance person I should be annoyed with or is this argument simply an excuse for having an easier life and not doing the work involved in putting together a truly individual solution for each client? Whatever the answer this industry will never grow the size of the market until we break out of the price war - and that means all of us; advisers, providers, comparison engines, comparison databases and compliance people.
Back on the plane they managed to find the missing person's bags and we took off for Edinburgh only about half an hour late. But I was still left in a mildly grumpy state by this unknown person. However, it's often easy to blame those we cannot see for what is wrong, but the reality is that if we want to change things, the buck stops right here with us. I'd like to think that we can grow the protection market and move on from the price only argument and start to put advice at the forefront of everything we do, we just have to get on and do it. There should be no limit to our ambition or our potential.
Roger Edwards is product director at Bright Grey
The views expressed in this blog are those of the individual.IFAonline
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