Last week’s article, Is Conflict of Interest a Double-edged Sword? drew a lot of comment.
A short-term broker writes:
I was faced with my agency being cancelled by an insurer due to lack of growth. I had a number of clients placed with them that were left high and dry. I took the matter up with top management but they went through with the cancellation and I was forced to find alternative cover or financial advisors for those who did not want to leave that particular insurer.
An interesting aspect which I picked up from the RDR discussion document concerns the proposed criteria to qualify as an independent adviser, one of which states that such an adviser should not be subject to any “product supplier targets”. It will be interesting to see how this impacts on broker contracts if implemented.
Another broker had a rather lucky break:
It was interesting reading your reader’s experience of the conflict of interest caused by an assurer. I had a similar issue and went along with the withdrawal of support from one of the providers. I was put on their internal or telephonic support system and, ironically, the service levels improved dramatically. So much so, that I actually began putting business their way again. I was then approached to be placed on their elevated support level again which I gratefully declined – things ticked along very nicely and I was not going to change it!
It is a sad indictment indeed if the scaled down version of service is better than the perceived first class service. It will also be very interesting to see what impact TCF will have on this arrangement. Lower service levels could be seen as detrimental to the client, and may not be kosher as far as fair treatment of clients is concerned.
Another observation from a reader concerns the bonuses earned by broker consultants on business volumes. Low production brokers receive very little attention compared to the top producers, which also impacts on clients in an indirect manner. Is this another manifestation of COI?
We are heading for interesting times, methinks.