Once upon a time the government made it a legal requirement for those who owned or used a motor vehicle on a road to carry insurance in relation to the use of that vehicle. As a result, a certain breed of person, called the insurance broker, found he could make a living by placing such business to the advantage of his clients and things were good.
Then came the internet and online brokers. One online broker could do the work of thousands of the over-the-counter brokers, and soon the over-the-counter brokers were put out of business.
Then came a law requiring the abolition of commissions closely followed by a law requiring every employer in the UK to provide workplace pensions. The terms and conditions of such workplace pensions were so unattractive that only five or six insurance companies decided to take such business. Of the few that did, they made use of the internet for accepting business. Just like motor insurance, soon IFAs found they were not required.
Financial advisers then found the majority of people preferred not to pay fees for the products provided and IFAs went out of business.
The moral of the above story? Do not just sit around contemplating the validity of what I have said; spend the next five minutes putting pen to paper to the prime minister. By doing so at least you will then have earned the right to complain when you do go under.
Julian Pruggmayer
Financial Risk Management,
Wolverhampton
