This is one approach which does little to convince us that the financial services world is embracing professionalism
I really want to believe. I am looking forward to the new dawn in January when the Retail Distribution Review clicks into reality, when professionalism hits financial services, and when I shall no longer be able to rage on about mis-selling and commission-crazed intermediaries.
But I fear that the new era may not exactly shine. There are still unreformed “endowment-deniers”, if the IFA weekly press is any measure. One recent letter complained that endowment critics never mention those who “walked away with more money than they could dream of when the policies matured”.
That's true. A few, from the 1970s and earlier part of the 1980s scooped the pool. Trouble is, these plans were not sold as risk investments at any time. Older readers will remember the line that they would pay off the mortgage and leave enough over for a cruise/wedding/new car. These were not Taiwanese warrants. There was the implication (often a firm statement) that these could not lose. A child could pull this IFA whinge apart.
A call I received early this month should be of more concern to today's protection specialists.
I was phoned from what, judging by the background noise, was a call centre. Sam (no surname) told me he was from Cheshire-based Premium Genie. His excuse for phoning was that I had completed an online survey six months ago about Asda. Well, maybe I did. And I apparently ticked a box that said I was interested in “over 50 insurance”.
Sam told me he could help with my funeral expenses and leaving money to my family. He asked me if I had a wife and children. It was obviously nothing to do with Asda or any other supermarket. This was just an excuse to gather data.
He took my date of birth and asked if I smoked – there were “additional benefits” for non-smokers. He told me Premium Genie was “FSA-regulated” (Financial Services Authority) as an appointed representative of a mortgage broker.
Then Sam – the warm-up guy – passed me over to Simon who told me the cover is “to cater for funeral expenses and to leave money to loved ones”.
Did I know the cost of a funeral? No – I might (but didn't) have added that it's not a known value item like a bottle of milk.
“The typical UK funeral is £4,500 to £5,000. Our cover starts at £10 a month but most look at £20 to £25,” Simon said.
I opted for £25. The cover, he said, came from Engage Mutual.
"That's all they do other than child bonds," he explained. "They're the best in the market."
He added: “It's a whole of life plan which pays out on death but you pay nothing after you reach 90. And what you get is tax free. If you die in the first two years, you only get paid if it was from an accident when you could get the lower of three times the payout or £48,000.”
“Otherwise,” he cheerily informed me, “your family gets the premiums paid plus 50% – that's a lot better than money in the bank.”
Benefits included being able to name a beneficiary for “money left after the funeral expenses” and a £250 discount on Co-op Funeralcare.