From the Ed: Is 'selling' the lesser of two evils?

About two years ago, a retired ‘adviser’ invited me for lunch. He wanted to discuss today’s advisory market and compare it with his 1970s “heyday” (with Sun Alliance & London). I accepted.

What followed was both odd (he insisted I wear a pair of his slippers in his Victoria apartment), and enlightening.

We spent half an hour or so in his study, where he told me about his time at Sun Alliance. He was its stand-out salesman, no question. He had the certificates to prove it. He was proud of them. “I was the star,” he said.

This man was no IFA, but, outside of the banks, you’d be hard-pressed to hear anyone in the industry speak in similar terms today, and especially not when in earshot of the FSA.

The word selling has become taboo in financial services. A consequence of the RDR is that it has shifted the accepted rhetoric away from ‘sales’ and towards ‘advice’, but has this been to the detriment of the consumer?

One adviser, commenting on an IFAonline article headlined ‘Selling: Not a dirty word’, suggested today’s market is not as healthy as it was in previous decades: “Most of our clients have fairly good-sized pension funds,” he wrote.

“The reason for this is that many years ago an insurance agent sold them a pension. He probably had targets to meet and was paid a good amount of commission. These poor ‘victims’ will now have a far better retirement than those [who] were not sold to, and I very much doubt they have reason to complain.”

It is an interesting thought, but by no means a new one. A few years back, I remember a white paper on protection gave a metaphorical nod towards the era of the door-to-door salesman.

At the event promoting the launch, one adviser – it escapes me who – said the findings would cause a bit of a stir, and he was right. Afterward, Fay Goddard, now president of the Personal Finance Society, said it was wrong to rose-tint the era of the ‘Man from the Pru’, and others agreed.

In some respects, Goddard was undoubtedly right. But, with some insistent that RDR will shrink consumer access to advice, there is a question worth considering: Is it better to have a bustling adviser market with some risk of mis-selling, or a potentially moribund market with little risk of mis-selling?

Scott Sinclair

Editor, Professional Adviser and IFAonline.co.uk