Past performance is no guide to the future – but this is what I have learnt along the way.
My career in what can loosely be described as financial services began a very long time ago, back in 1980 to be precise. After a couple of years as a pen pushing lowly clerk, I managed to secure the position of an “inspector” in the City of London with a well known insurance company of that time (now defunct).
An Inspector historically was an individual whose job was primarily to decide who was deemed worthy of representing and selling the products of the company. Knowledge of financial matters, or even the products themselves, came secondary to being regarded as an upstanding member of society, hence teachers, lawyers, architects and other professionals often supplemented their own income by representing and selling on insurance company products in return for a commission. This was not a regulated activity and it is easy to imagine that the end consumer had little or no protection and miss-selling was commonplace.
By the early 80s, the Inspector’s job had evolved a little, and my purpose was to sell company products to full-time intermediaries who would in turn sell on to the end customer. As a wet behind the ears rookie, I was told that my “training” would be undertaken by the company’s most senior and successful Inspector, a Scottish gentleman called John. John gave off the aura of a member of the landed gentry and although a Scot by birth, he had been living and working in central London for many years. He was undoubtedly successful, wore Savile Row suits and drove a dark green Jaguar.
John’s daily routine was this: 10am – arrive at the office, shuffle a few papers and chat with colleagues over coffee. 11am – leave the office in Cheapside, accompanied by the rookie trainee (me). 11.30 – arrive at Ye Olde Cheshire Cheese public house in Fleet Street. For the next four hours or so, John’s “brokers” would pop in to see him for an hour or two and business would be done over a pint. And another pint. And a chaser or two. Possibly a cheese toastie. 4pm – John leaves the pub, rookie trailing in his wake, to return to the office. As well as maybe slurring slightly, eyes a little bloodshot, John would typically return with a fistful of signed proposal forms for new investment products he’d sold during a successful day’s business. I shudder to think about what advice, if any, the poor end customer received, let alone the deeply hidden product costs that supported this lifestyle.
Some 20 years later at around the turn of the century I had risen through the ranks with a different household name provider of investment products to the lofty heights of Regional Manager. For months one of the sales executives in my team had been trying to “crack” a key account. By now Independent Financial Advisers (IFAs) had appeared, regulated by the UK government’s Financial Services Authority as it was known as at that time. On a joint visit with my colleague to this key IFA it didn’t take me long to discover why my company weren’t doing business with this individual. Nothing to do with service, product features or investment track record which were all top notch. No, the problem was we “only” paid 5% commission and to be in with a shout, the IFA wanted to be paid 7% or more. What a cracking job this man was doing for his clients – using his independent status to scour the market for the investment product that would pay him, the IFA, the most money. He gave not two hoots about the product he was passing on to his customers, as they were, in his words “basically all the same”. Shameful, but commonplace.
Then, in the summer of 2003, I was made redundant. In retrospect it was the best thing that could have happened, and I joined Acumen Financial Planning and became a financial planner in a firm where clients really did come first. And I am not just saying that. I met MD Sandy Robertson who explained that they did not take commission like IFAs. Instead, AFP were engaged by and paid by their clients to act on their behalf. AFP, and the bespoke financial plans we designed to get clients from point A to point B were our “products”. We were not insurance company salesmen poorly disguised as independent advisers. Whilst that was not unique in 2003, it was highly unusual – pioneering in many ways. A revolution was beginning that truly put clients first and Acumen Financial Planning were at the forefront of this new world.
In my next article I will illustrate what that means in practical terms for clients of our firm.
By Bill Saunders
Published on 28 January 2022
This article is related our Pensions & Retirement Planning service