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The phasing out of incapacity benefit and overhaul of the benefits system by the Government has now begun.

From now on, any new claimants will receive the replacement benefit – Employment and Support Allowance (ESA). Current claimants will be moved over to the new scheme within five years.

The reforms mean people will have to take jobs if they are capable of doing any work, even if that is in a much lower paid job than before they became ill. Only full-time carers and the most severely disabled will be exempt from being expected to move off benefits and into whatever job they’re deemed capable of.

This goal to help people back into work is to be applauded. But people may struggle financially under the scheme if they have to return to work in a different occupation.

For many people, switching jobs could mean a huge drop in salary. A surgeon might have to become a telephonist. An engineer might be asked to take a job as a checkout assistant.

This is where income protection provides a solution. As well as paying out a monthly sum while the customer is unable to work, it can also make up the difference if the customer goes back to work in a lower paid job.

This proportionate cover continues as long as the customer is unable to return to their old job and is earning less, for the time the policy is in force – which is ideally until retirement age.

For example, a customer has chosen an income protection payment of £2,000 a month. His illness means he can’t go back to his old job, but he does have the ability to do a different job. Unfortunately the new job pays less than the old job – just £1,200 a month. The income protection policy would pay out the difference – £800 a month – so the customer isn’t financially disadvantaged by making the effort to go back to work.

For advisers that means it’s important for customers to look at whether they need to take out income protection. It can give them the peace of mind that, even with changes to government support, they will be able to survive financially if their health deteriorates.

Stuart Lawson is protection marketing manager for AXA

In between yuletide festivities I managed to catch a Christmas special of Rab C Nesbitt that showed how different the end of 2008 is to the closing moments of recent years.

The Glaswegian armchair philosopher observed he was far fitter in his new role as a house husband than we was when he sat on his backside drinking. He pointed out that he now had to rush to the shops to buy his dinner before food prices went up and then he had to run home to cook the dish before gas prices soared.

At the end of last year perhaps the string vest wearing sage could have walked a little bit slower and relied on his credit card to cushion the blow of escalating prices. But in 2008 he could not rely on being rescued by easy credit being made available by the banks. Instead, as various television shows told him, he was now bailing out the banks.

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Looking into her crystal ball last month, in Glasgow, a “psychic” told me that 2009 was going to be a good year for me.

And that’s something I’m quite looking forward to. Not that 2008 was particularly bad, but I’m hoping 2009 will be better.

That’s because I’m praying 2009 will be the year I can move out of my dingy rented flat and become a happy first time buyer.

The property crash has become my friend in a way that the property boom could never be and may soon (fingers crossed) with a few more house price falls and some hard saving make my dream come true.

So what’s your dream for 2009? Maybe it’s to expand your property empire or a simple wish such as keeping your business afloat.

If that’s the case, IFA Life today threw out some tips on how IFAs can bolster their marketing activities to increase their profiles and in turn lift business.

It suggests fostering a network of loyal advocates who will promote and refer your services, writing a new marketing strategy including starting a blog and writing for the press as well as sending out press releases to boost your business profile.

Does any of this appeal? How are you planning to adapt your business models to fit in with the 2009 economic landscape which at the moment looks to be as subdued and troublesome as 2008.

Tell us here.

As 2008 draws to a close, it is time to ask whether the credit crunch has helped or hindered the young adviser campaign.

On the one hand, as our last two entries have discussed, there are pitifully few flashy packages under the employment Christmas tree this year.

On the other, awareness of financial services, and the ethical imperative for decent advice, must be at an all time high among high street savers and young graduates alike.

David Jackman used to lead the FSA’s training and competence division and wrote the FSA Examination Review that set the RDR ball rolling. He welcomes the alarm bells the crisis has set jingling.

“The public’s view of the industry is so low now that they expect to see professional advice. They won’t tolerate sales,” he says.

But he also calls the training aspect of the RDR proposal a “fudge”. “Level 4 is simply not high enough for a professional adviser. You’ve got to go to degree level to attract young talent. A few oldies might leave, but that’s tough – this is a long term strategy,” he stresses.

The FSA is wary of imposing extra costs on IFAs during a recession. In market conditions like these, with firms struggling under cash flow pressures, training certainly counts as a cost.

But Mr Jackman also puts the compromise down to adviser “fatigue”. “When I started the FSA Examination Review back in 2002-2003, we got a lot of very positive feedback from IFAs. But it’s gone through such a long process of agonising and consultation that they’re understandably fed up with the whole thing.”

Who would have thought at the beginning of 2008 that redundancies, mergers & acquisitions and government bailouts would become common occurrences?

In a year that rocked the mortgage world straight to its core, we have seen large banking groups borrow billions of pounds from the government, stalwarts of the financial industry collapse and HBoS, once the largest bank in the UK, taken over by Lloyds TSB.

But where do we go from here?

Unfortunately economists are not predicting conditions to get any better in the next year. In addition, lenders such as Halifax have pulled their 2009 housing predictions, because, I assume, they can’t predict what will happen.

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Whilst the Chancellor’s Pre-Budget Report doesn’t seem to have done much to re-ignite the housing market, there are at least a number of opportunities for advisers, whether they’re pure mortgage brokers or those who erstwhile have concentrated on mortgage or family protection sales.

Advisers should be considering wider opportunities in the market place and there are growing opportunities in terms of the business protection segment.

The needs of a business are relatively few and uncomplicated. They might encompass: key person cover, shareholder protection (succession planning), and/or business loans.

Whilst there are some added points to consider compared to standard mortgage protection, there is substantial support available from those providers active in the segment.

The products are essentially the same to those recommended to individual customers and the medical underwriting is broadly similar. Sums assured are going to be higher and they have to be justified financially and whilst the premiums will be higher, it follows that commission payments will be proportionately more attractive.

In terms of life policies, the key features are large sums assured, often older and sometimes unhealthy clients with more complex medical and financial underwriting issues.

Shareholder plans should be written in trust, and cross option agreements produced. Speed is often of the essence.

The good news is that there are a number of insurers with experience of this market.

Feedback shows that advisers want support with technical and legal documentation. They want access to the most competent of underwriters who specialise in large case handling and who will talk them through the process, before and after the client meeting.

They want support through quality literature and case studies. They want sales support and to be kept abreast of market developments.

Providers are constantly looking for ways to facilitate entry for advisers new to the business market. Some quite unique adviser tools have been developed which will be of enormous help to new advisers.

It’s a market well worth a second look, whether advisers currently focus on mortgages, investments, pensions or all of these.

The likelihood is, some of these customers will already have a business assurance need.

Gerry Warner is protection development manager of Zurich UK Life

For fear of being the IA Christmas Grinch, there is one large, unwrapped elephant stood next to the Christmas tree in many graduate advisers’ homes this week: the promised financial services job they were told they were needed to fill may have vanished up the chimney.

In a November IA interview, Simon Culhane, chief executive of the Securities & Investment Institute, said: “We are budgeting for a 50 per cent reduction in graduates for 2009.

“Firms took on their 2008 graduates because those decisions were taken in July 2007, at a different point in the cycle and just before the subprime crisis started. New entrants and graduates are very affected by this.”

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Madam ,
I was a financial adviser for 10 years up to 1988 but, finding myself increasingly disillusioned with what was happening in the personal finance industry, I successfully volunteered for a place on a 20 year expedition to Planet Zog to bring life assurance to the Zogians. I was hoping that, on my return, things might have improved in personal finance.

How wrong could I be? On re-entering the earth’s atmosphere during my return journey, I discovered a wonderful device called the world wide web, which has enabled me to catch up with events of the past 20 years. By Zeus! I could hardly believe what I was reading!

When I left there was a maximum commissions agreement in force, which I thought was a jolly good idea. I gather, though that it was scrapped as being “uncompetitive” with the result that commissions went through the roof. I could have told them that for nothing but I was light years away by then.
I couldn’t believe how stupid chancellor Gordon Brown was to actually give notice in his 1997 Budget that double tax relief on mortgage interest was going to end in April 1988. Anyone could see it would result in a mortgage frenzy followed promptly by a collapse in house prices. And he was supposed to be charge of our money!

And how was fat Bob allowed to raid the Daily Mirror’s pension fund? Did no one see that coming? Fat lot of use passing retrospective laws when there are hardly any company pension schemes left to be members of. Gordon Brown was just as bad when he raided company pensions by abolishing ACT. And that was legal!

I see that the multitude of regulators that were around when I left has been squeezed in to one giant one, but they don’t seem to have made a very good job of it so far – what with the split cap investment trust debacle, and the stories about the Lautro charges cock up and the guaranteed annuities fiasco that I read in my online Money Management.

When I left, that nice Richard Branson, who I remember as publishing that lovely Tubular Bells LP, had launched his own airline. Now I see that he’s running a railway line and a life insurance company too. After that little shock I tried to look up the value of my own life policies online, only to find most of the companies have vanished, including, unbelievably Equitable Life, or been taken over by foreigners.
Speaking of foreigners, what’s all this nonsense about Europe? Last time I was there it took two hours to get to France on a clapped out ferry; now I find there’s actually a tunnel connecting Blighty with them. What benefit’s that been for everyone? Lots of weird initials, more bureaucracy and unit trusts being called oeics. I always thought that meant ignorant or inferior – different spelling though.

One of the things I thought I’d miss when I embarked on my space mission was the chance to work in a polarised market. Now I find this was scrapped a few years ago and the banks have been having a free for all in the subsequent confusion. And I see that the bankers have now managed to cause a worldwide meltdown following their inability to manage mortgages. I was obviously looking in the wrong place on the web, because – surprise! – I couldn’t find any reference to those in question being fined or going to prison for the chaos they’ve caused. That would never have happened on Zog – there, they would simply have been vapourised and their details deleted from life’s database.

What to do now? My mission to Planet Zog completed, I thought I might return to being an independent adviser. But I discover from something called the RDR report that despite spending six years obtaining my FCII back in the 80s, it now counts for only 80 points towards something called a QCA level 4. In order to continue trading after 2012 this means I’ll have to take even more exams. Sigh.

I have therefore decided, reluctantly, to have myself cryogenically frozen, with instructions to my keepers to thaw me out in 10 years, when the first child trust funds will mature and the post war baby boomers will start to pop their clogs and hopefully release some of that equity they’re sitting on. I hope that by then some sanity might have returned both to the markets and to this once wonderful industry – always assuming, of course, that there’s any personal finance industry left to return to in the first place…

Yours resignedly,
Disillusioned of Planet Zog,
Via ethereal matter advanced inter-galactic letter (email)

Enough has now been written on Equitable Life to sink a ship, yet the government stubbornly refuses to even contemplate compensating the victims of the incompetence and arrogance of that former blue chip society.

After the breathtakingly comprehensive Penrose Report, all 700 pages of it, and further reports by the parliamentary ombudsman, the European parliament, an internal secret report by the FSA, one by the actuarial profession and now a further 400 pages by the public administration select committee, the government is still sticking to its guns.

The reality, as is clear to any independent person looking at the evidence, is that it was regulatory failure – by the Department of Trade and Industry, the FSA and its predecessor bodies and the Government Ombudsman’s Department – and the intimidation of government officials and junior staff at the society, as much as its over-generous GARs, which led to the society’s near collapse.

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Given that property prices have been dropping like a rock over recent months, it is little wonder that many people are beginning to warm up to the idea that now might be a good time to buy.

According to the Building Society Association’s Property Tracker survey, 46 per cent of people agree to some extent that now is a good time to purchase. That’s up from 34 per cent of people who thought that way in September.

The problem with this hypothesis, however, is that it remains extremely difficult to secure the lending so many people require to either get on the property ladder or buy that longed for upgrade/investment/weekender.

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There is an old saying in the direct marketing industry that you should ‘run after customers, not sales’, and If ever there was a market it applied to, it is today’s mortgage broker market.

Another way of looking at it, perhaps better known to the film buffs in the industry is the quote from the film ‘Field of Dreams’ – “Build it and they will come”.

In our business, sales are not an end in themselves, they are a consequence of having customers. And repeat sales, year after year as a customers needs change will flow from establishing a good customer relationship rather than a sales relationship with the people you deal with.

The focus on repeat purchases by customers is perhaps most apparent in direct marketing, where the cost of everything can be measured and valued.

Direct mail order companies know the costs of their brochures, their adverts, their mailings, their telephone call handling, and they know how much ‘junk mail’ to push out to get the response they need to make an economic return.

But how do you think they feel if a one-time buyer rings them back, directly, and asks to buy some more? Fabulous – free business!

And a little work in changing a one-off sales relationship (which sadly a proportion of our industry fell into over the last couple of busy years) into a real, ongoing customer relationship will pay dividends in the future.

What you are seeking to build is a long term relationship with the customer. And you have the tools to do it. You’ll have had to do a pretty comprehensive fact find (knowing your customer) to have done the first mortgage.

You’ll know their employment, their earnings, their family circumstances – kids, etc – and may well have an idea of their views of their own financial outlook from the discussion you’ll have had around fixed or variable mortgages.

So, if at the end of a lender’s ‘deal’ period, they offer your client a good retention deal – don’t give up. These people were your customers before they were the lenders, and you’ve done a fact find and the lender hasn’t. Who is best equipped to review the financial needs of your customer?

And if you can’t realistically better the lender offer, what other financial services needs might you be able to service based on your long-term relationship? More mortgage protection? Some additional life insurance or critical illness cover to build protection for the family? A more competitive buildings and contents quote?

And invest in a five-year diary and store up the next ‘deal’ date for further down the line – build your business for the future.

So in looking forward to 2009, I believe good advisers should be making retention of their customers – across the range of their financial needs – their absolute goal.

Stephen Smith is director of housing at Legal & General

It may be the season of goodwill, but the gall of unemployment is starting to poison young advisers’ festive turkeys.

The prospect of consolidation, disillusioned clients and little funding from employers is cutting off opportunities for junior hotshots just as their careers start to flourish.

The RDR has reminded advisers to qualify is to survive, but according to Fay Goddard, chief executive of the Personal Finance Society, the problem is funding the alphabet soup that frequents advisers’ letterheads.

“Despite the economic climate, the feedback we get is there is still a demand for advice. The problem is investing in training and development,” she says.

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Lloyds TSB’s takeover of HBoS looks pretty much to be in the bag.

After a turbulent week (which saw the banks successfully stand before the Competition Appeal Tribunal in defence of the deal following The Merger Action Group’s challenge to Lord Mandelson’s decision to rush through the proposed takeover) the merger – which will create a UK banking giant with over 3,000 branches and 145,000 staff – is now essentially approved.

And after HBoS shareholders’ resounding support of the takeover during today’s vote (some 98 per cent of shareholders are said to have voted in favour), things couldn’t get much cosier between the two banks.

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Despite the fact that Christmas is just under two weeks away and most people probably haven’t even put their tree up, the office phones have definitely gone a bit quieter and the inbox is ever-so-slightly less full.

Conventional wisdom dictates that the holiday period will be a quiet one for businesses but is this really just a self fulfilling prophecy?

The downturn in business is partly caused by companies closing down for two weeks because they are expecting a downturn in business and so the chain of causation works both ways.

As the old adage goes, supply creates its own demand.

If companies offering financial products and services shut down for a sizeable chunk of the month then by default they will do less business than if they were open. But are there really less consumers looking for advice about these products and services?

Looking at what consumers are doing online gives a good indication of how consumers actually behave at this time of the year as you can look at quantifiable indicators such as website visits, adverts clicked, leads generated etc.

For the country as a whole there will be less people going online looking for life insurance, loans, investment advice etc. But this fall is nowhere near as large as the reduction in business caused by companies closing their doors for two weeks.

Remember, there are 31 days in December. A consumer might not want to talk to somebody about their tax liabilities during Christmas lunch but in the run up to the 25th and after a few of days of overconsumption, financial matters soon get firmly back on the agenda.

In the age of the internet, sophisticated online marketing methods enable finance companies to plan ahead in meticulous detail and ensure a consistent flow of business throughout the year.

For the forward thinking companies out there, the festive period offers a valuable opportunity to acquire customers cheaply and start 2009 ahead of the competition.

Justin Rees is head of marketing at LeadPoint UK

While observing from the sidelines while the world experiences a domino-effect economic slowdown, one thing occurred to me.

From bank bail outs, to the sale of car giant Honda and even the administration of well-known Woolworths, the finger of blame has pointed to one direction: The credit crunch.

The recession, financial downturn, credit crisis, or whatever you wish to call it, is here to stay and looks set to be a consistent punching bag for any future woes of the global economy.

But it’s all too easy to point the finger at something which is quite obviously beyond anyone’s control?

For example, the credit crunch has claimed another victim in financial services, as troubled asset manager New Star has been sucked into the black abyss – excuse the pun.

With a significant dip in assets under management and citing a £260m debt, this has resulted in the recent corporate restructuring and proposals of having to be partly owned by a cluster of high-street banks. This would amount to 75 per cent of the business in fact being de-listed from the stock exchange.

The asset manager had said commented: “As the credit crisis has deepened since September, a number of New Star clients have signalled their concerns about its level of debt in the face of a possibly prolonged economic downturn.”

And chairman John Duffield had added: “The board recognised the concerns of our clients regarding the level of our debt during these difficult times.”

But can its investors and shareholders blame the recession for the downturn that New Star is currently experiencing? Should its difficult times be solely attributed to the current climate?

With temporary suspension of dealing in its International Property fund and the lack of delivery in returns for funds such as its UK Property fund, due to increasing levels of redemptions; many clients, advisers and investors – may back the notion that New Star’s underperformance cannot surely just be down to “difficult times.”

Should some acknowledgement and responsibility not be taken by the asset manager for not delivering the promised returns?

Others may argue that New Star’s focus and energies should be spent on facing 2009’s challenges head on – rather than having to justify itself. Pointing at the recession punch bag seems all too easy to do when things take a turn for the worse.

As we head towards Christmas, the level of festive cheer seems to be noticeably lower than in previous years.

We need only switch on the news to hear the doom-and-gloom headlines about an economy in turmoil. Retail stalwarts Woolworths and MFI are the latest to fall into difficulty, while the traditional January sales seem to have started in November.

Elsewhere, the British Bankers Association has revealed that mortgage approvals in October were down to less than half what they were the same time last year. And consumer spending continues to plummet, with the Office of National Statistics recording the biggest drop for 13 years between quarter 2 and quarter 3 this year.

On an individual level, everyone has the dark cloud hanging over them of higher national insurance and possibly tax contributions a year or two down the line.

But amongst all the glum announcements, there are still some reasons to be jolly:

- Cut in VAT – it may mean relatively little in terms of money saved for consumers. But all the news headlines have helped raise awareness of financial matters – which could translate into more consumers seeking professional financial advice.

- The average cost of a house in the UK has fallen to £158,442, according to November’s Nationwide House Price Index. This is below the new stamp duty threshold of £175,000. Add to this the welcome cuts in interest rates and we could see more first-time buyers venturing onto the housing ladder come the New Year.

- Time. It’s often only when there’s a lull in trading that businesses have a chance to sit back, reassess their situation and plan their future strategy. Perhaps the fundamental changes occurring in the economy are an opportunity to rethink goals which in turn may require a completely different business model for a new world.

Depressing though the current situation is, being smart about the opportunities it brings as well as the challenges could be the best way to have a merry Christmas.

Graham Harvey is managing director of Protection at AXA

Only a brave group of souls would take on the government and challenge its decisions on how to run the UK economy and its banks.

But that’s exactly what The Merger Action Group (MAG) has done.

Spurred on by more than 600 supporters, the group has taken business secretary Lord Mandelson to the Competition Appeal Tribunal over his decision to rush through the proposed takeover of HBoS by Lloyds TSB and over-ride competition concerns.

MAG argues that Mandelson must be ordered to refer the merger to the Competition Commission for further consideration.

Around 40 lawyers are taking part in the case at the CAT’s building in central London – 35 of them representing Mandelson, HBoS and Lloyds TSB.

With such weight behind the government, it’s difficult to imagine that MAG will win, but then stranger things have happened in the world of financial services and the issue is of real importance to the industry.

At one point during the two-day tribunal, Mandelson’s defence suggested that MAG’s concern with the proposed tie-up was merely “fanciful”.

However, the QC representing MAG said: “They are not busy-bodies looking over the fence at something that does not concern them. They are regular users of banking services and they will undoubtedly suffer if competition is severely reduced.”

Understandably, HBoS wants the whole saga to go away. Especially with its shareholders expected to vote on the proposed merger this Friday 12 December.

CAT says it will reach a decision on whether to refer the case to the Competition Commission relatively quickly, possibly as soon as later today or tomorrow.

But as heart-warming as this plight is, the question of whether this is really in the interests of consumers has to be asked.

If it is a toss up between a failed bank or less choice for consumers, which is the lesser evil?
Are MAG actually doing a good thing or are they opening up a can of worms that could lead to more unfavourable outcomes for industry?

Tell us what you think – and watch this space to find out the result.

The debate on capital adequacy requirements is becoming quite heated and there seems to be no consensus on the effect it will have on the industry.

Some small IFAs say they simply don’t have £20,000 to put aside, while in response, others say if they don’t have this small amount of money they are simply in the wrong business.

Jumping on the bandwagon and in a bit of a controversial twist, national IFA 2planWealth Management has called for the £20,000 capital floor to be raised even higher.

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The Young Adviser blog was originally conceived to promote the next generation of independent financial advisers.

However, in the past few months, events in global economies and the volatility experienced in the UK financial services sector have overtaken the industry.

We’re currently facing one of the worst trading environments in living memory and on the cusp of a major recession.

In this type of environment, young advisers might not be asking “how do I get in” but “how do I stay in”.

However, Chris Cummings, director-general of Aifa, believes young advisers should be prepared for the worst but remain positive.

“I’m really optimistic about the future,” he explains. “We often talk about a savings gap or a protection gap, but what we have is an advice gap.

“Financial advice has never been in more demand.”

He says, despite the current difficulties facing many advisers, consumers will always require good financial advice.

Mr Cummings says advisers should be investing in their careers to have as many qualifications as they can, making them more marketable and knowledgeable in times of financial woe.

“For the right people, doing the right things, there will always be opportunities,” he adds.

At a time of recession, unemployment and corporate consolidation, can our readers be expected to share Mr Cummings’s opinion?

With many businesses feeling the squeeze as a result of the economic meltdown, some would argue that now is not the time to approach companies about business protection.

And, that this level of protection is a luxury that firms simply can’t afford at a time when they are working hard to reduce their costs. However, it’s actually during these uncertain times that the need for protection becomes much clearer and more evidently important.

Over 10,000 UK businesses failed in the first half of this year, a 17.5 per cent increase compared to the same period in 2007 .

With the credit crunch continuing to bite, senior managers should be focussing even more on ways to control and minimise risks to their business. Now is a great time to present the case for business protection as part of the risk management process.

There are currently 4.5 million businesses in the UK and 99.9 per cent of these are small to medium sized firms.

For these types of businesses, reliance on a key individual will be more likely, so it’s more important they are financially secure if ever the worst were to happen to that keyperson.

Prior to the credit crunch, if a keyperson were to die the bank may have been sympathetic and supported the business through any difficulties while that individual was replaced.

Now though this is less likely given the squeeze on lending and other capital constraints among banks.

And what about Directors’ loans?

Directors sometimes lend money to their company on an unsecured basis or they simply leave some or all of their net salary/bonus or dividends with the company, which acts as another form of loan.

If that director were to die or become seriously ill, his family would expect the company to repay the loan, which again could put a strain on the company’s finances until they could secure an alternative credit arrangement.

The death or serious illness of a keyperson often occurs when least expected and can cause loss of profit, interruption to cash flow, disruptions to loan repayment and changes in shareholder control.

In some instances the financial burden can be so great that the business is unable to continue. Firms could do without this unnecessary worry in the current climate.

Now is the time to be getting down to business and highlighting the financial peace of mind that Business Protection provides!

Mark Jones is head of protection at Friends Provident

The issue of capital requirements is continuing to cause problems amongst the financial adviser community.

Under RDR proposals, the FSA wants to extend the expenditure-based requirement to all firms based on three months of annual fixed expenditure raising the minimum capital resources level from £10,000 to £20,000 for all firms.

Yesterday, FTAdviser.com spoke to one sole-trading IFA who had already decided to jump ship and join a network instead, because he simply did not see himself being able to meet the FSA’s capital requirements.

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In life it is often assumed that you always get what you pay for, but the SIPP market is a perfect illustration that this is not necessarily the case.

The electronic SIPP (eSIPP) sector is continuing to flourish but confusion still reigns in the minds of many about exactly what benefits eSIPPs actually offer.

Most electronic products now offer a range of collective funds, unit trusts and OEICs that often represent good value to the right investor.

They all offer online dealing and online valuation, which reduces costs for the provider but also for the customer.

The average age of eSIPP clients tends to be mid 40s, which is 10 years younger than a conventional SIPP investor.

On of the main attractions however, is cost and when a provider can offer both a high quality service and a low cost the online version of a SIPP is a very compelling offer.

eSIPPs allow the investor to make their own investment decision about how eSIPP funds are invested or to formulate an investment strategy in conjunction with a financial adviser.

Opting for the electronic option means that applications are processed swiftly and there are a number of enhanced efficiencies because the product is essentially mass produced and automated.

Some propositions offer the ability to trade if there is a stocks and shares trading service, while the leading eSIPPs now offer the ability to track the performance of an individual portfolio online.

All in all an online SIPP is well worth considering as they will have broad appeal given both the potential efficiencies and low running costs.

Chris Smeaton is propositions and e-commerce manager at James Hay

Technology moves so fast, out in the real world, that the conservative arena of financial services can seem glacial in comparison.

While children and teenagers are going about their daily businesses of amusing themselves with items such as Nintendo Wiis and iPod-nano-colour-touches, financial technology providers are proudly announcing software upgrades which enable IFAs to send automated emails.

That said, if the figures from Norwich Union revealed in today’s Financial Adviser are to be believed, perhaps the industry needs to spend a little time sitting back with the abaci and the quills. Maybe the financial services aren’t ready for anything more sophisticated.

A ludicrous 57 per cent of valuation requests made to one of the country’s biggest insurers result in errors which means they have to be remade.
Sometimes the fault is the provider’s, sometimes the adviser’s, always the problem the customer’s.

Wrong pin numbers are entered, mandatory password updates aren’t made, homework gets eaten by pets, goodness knows…

Technology is not a panacea, not necessarily anyway; if you can’t drive a car you’ll get further on horseback, no matter how much faster cars go.
However, the technology exists and people will keep trying to enhance it, so the industry has two options.

It can self consciously go back to writing in ink or exclusively use snail mail, or it can learn to use the software it spends so much time developing and money buying.

They’re not really options, there is only the latter. The questions are how and when?

What would be the point of a further base rate cut? In the last couple of days I have been inundated with industry experts hopes for the outcome of the latest Monetary Policy Committee meeting, which is due to take place tomorrow.

Comments made by the Association of Mortgage Intermediaries are pretty typical of those I have received from both lenders and advisers. Ami has called for a 100 basis point cut.

Robert Sinclair, director of Ami, said the base rate needed to be reduced to 2 per cent if the fiscal stimulus announced in the chancellor’s pre-Budget report was to get the mortgage market moving again.

Hmmm. The last two dramatic base rate reductions failed to prompt mortgage lenders to flood the market with better priced deals so why should another base rate reduction force their hand?

At the start of this crisis, as the government seemed to allow things like Northern Rock to drag on, I was happy to demand swift and dramatic action. But when should we start to wait to see if steps already taken will achieve the desired goals?

Also, is it healthy to focus on the base rate as a cure for all our mortgage ills?

From the responses we have had to the Young Adviser blog it seems clear there is no shortage of individuals keen to enter the industry.

In addition, there is a real sense among the young adviser community of wanting to raise standards and turn financial advice into a profession to be proud of.

There is, however, frustration among those who are working hard but don’t feel they are being appreciated or properly utilised by the companies they are working for.

Whether they are stuck in an unfulfilling sales role or are para-planning in a back office, young advisers simply do not feel they are being rewarded for the hard work they are putting in to gain qualifications.

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