The beer industry has this week seen a major shakeup with the announcement that the tied-beer system has been scrapped. Being tied to a particular brewery was a tradition that went back to the middle of the 1600s when, keen to curb competition, breweries would tie-in pubs to control their market share. It meant that pubs were tied to that brewery, and in return they would get subsidised rent and other benefits. By 1830, more than half of publicans were tied to a commercial brewer and could only sell their beer, a restricted proposition it seems. Whitbread, one of the largest breweries to do this, sold most of its beer trough a tied house.
This week, Parliament voted in favour of removing the restricted status, sorry I meant tied, allowing pub owners to buy their beer from any product provider, giving them the ability to offer clients a full range of products.
In the financial services industry, restricted advisers continue to drink tied-beer with the industry happy that they can only sell a limited proposition to clients. However can they recommend another beer to a client, especially if it is more suitable to their needs? Can they or would they ever recommend a product type or a product provider, even if that product or that product provider would be suitable for a client?
Being known as tied in the beer industry just does not sound right; it doesn’t have that je ne sais quoi ring to it. Similarly if I was one night at a whole of market pub discussing with my friends, while enjoying a cold independent beer, about whether I should go an independent or restricted adviser to seek advice, I would opt for the independent. It just sounds right. Restricted seems too, how can I put it, restricted, tied down.
If however I was offered a specialist beer I would jump at the opportunity, it describes the beer perfectly. A restricted proposition would just dampen the taste. So here’s to independent and specialist propositions in both pub and financial services!