Stuart Wilson (pictured) is chief executive at Air Group
In this business it’s hard not to continually question whether what you are providing to your customers – in terms of your proposition, your positioning, the products and services you can access for them – is actually important to them.
For instances, in financial services as a whole we focus a lot on the ‘value of independence’ and, from a consumer point of view, there tends to be a short-hand written that ‘independence is best’ for all, and consumers should only use those advisers who are truly independent.
Whatever that might mean.
Because the facts of the matter are actually much more complicated than that.
Consumers are likely to have a vastly different understanding of ‘independence’ than the regulator, for example.
In the mortgage market we talk about access to whole-of-market when if you look at many advisers’ business volumes every year you may see the majority of business going to a certain number of lenders.
Or independence might actually be taken by consumers to mean ‘being independent from the lender itself’ although I guarantee there will be many borrowers who go direct to their bank or building society, come away with a product from them, and still believe they have received ‘independent advice’.
Consumers who understand their adviser is not just accessing the products of only one provider, might still not be aware that the adviser is only selecting from a panel.
It might be more prevalent in other financial services sectors like pensions or protection or GI, but it’s still a fundamental part of our market, and (as mentioned) having theoretical access to every single lender/provider may not mean a great deal if, at the end of the day, all your business goes in only a small number of directions.
In that sense, while we would always encourage the provision of whole of market (WOM) advice, we perhaps need to get away from a belief that panel-based propositions are somehow always inherently bad, and consumers should avoid them.
In the equity release space we have large numbers of advisory firms who, for a number of reasons, won’t have access to certain providers and their products anyway.
Does this make them poor advisers? No.
Does this make the advice and recommendation they provide to their clients poor? No.
In fact, some consumers might prefer a more simplified offering, especially if it is delivered by an adviser with all the necessary attributes to do well in this business, one who can offer empathy, understanding, care and consideration, along with all manner of soft skills that are valued by consumers.
There may come a point where, for these customers, the ‘value of independence’ is far outweighed by the ‘value of the adviser’ and therefore, at this point, ‘independence’ might become something of a red-herring.
Pushing the business as an ‘independent’ one in these circumstances doesn’t offer the firm, or its customers, anything new.
Indeed, there is an argument to suggest it could be holding the firm back and by having a more select proposition they could actually focus on the areas which will deliver them greater levels of business and greater levels of client satisfaction, namely marketing/lead generation/business development/best practice/training/compliance, etc.
This will be especially the case if, as mentioned, this is ‘independence’ in name only – where the vast majority of business is spread around a limited number of providers, and where the client themselves does not value that ‘independence’ anyway.
At this point a more limited provider/product proposition may start to make a lot more sense because it could also allow advisers/firms to move away from trying to sell the technical nature of their business, and instead focus on seeking out clients, working with them on their specific needs, and being the adviser that they want them to be.
One who sells the product benefits not the features, one who sells the opportunities the product can bring rather than the product brochure, and – to coin a favourite phrase of mine – one sells the sizzle not the sausage.
As an equity release advisory community we really need to focus on what is (and isn’t) important to consumers.
Where are we going through the motions and where is the real value to be delivered?
For many firms this will be in a WOM proposition and Air will always provide the support that such advisory firms need, giving access to all providers and products.
However, for other firms an alternative approach might be more suitable and less frightening than some advisers might think.
A more limited panel approach could work in their favour and it’s important for firms to explore new approaches which may actually deliver a better advice outcome for clients.
The point is that there are opportunities across both and, as a club/distributors active in this sector, we’ll be sure to offer access to the market whatever route is chosen.
Advisers are fortunate in that they can choose their own path, one which gets everyone to their destination with the maximum satisfaction.
