I am writing in response to the story about Friends Life approaching a client directly in connection with annuity sales (FA, 20 June).
It is perfectly possible and reasonable to cut the adviser out. However most customers prefer to defer the process of learning and take advice in order to make the right decision. Much as most people prefer to buy their vegetables rather than grow them, or go to a doctor when suffering a medical complaint rather than learn medicine.
Finance is a complex activity and most advisers are significantly more educated on the subject than clients – and that education comes at a cost – with the benefit being confidence that you have made the right decision.
I should also add that the empirical evidence is actually that independent advice provides a cheaper solution. Most of those companies which do not have to compete (because they deal direct) with other companies are more expensive than those that do. RDR was specifically designed to ensure that the cost of advice was unbundled so that we (yes, I am afraid I am one of those middlemen) can demonstrate the value of our advice separately from the value of the product. No longer are we able to ‘get away’ with offering the ‘best’ product, and calling that advice.
Sadly I believe the baby was thrown out with the bath water in that many folk who ‘need’ to be ‘sold’ savings and protection no longer will be, but that is a problem for the regulator and society.
John Stirling
IFA
AC Wealth Management
Saffron Walden
Essex
