Over a lifetime
Having celebrated my birthday on Wednesday, and undergone the usual conflictual emotions (joy at the chocolate cake, depression that my metabolism is no longer efficient enough to deal with it), I did reflect briefly on the fact that I have been active for 32 years in the financial services profession, and for 25 of those as an IFA.
The passage of that kind of time period does have an impact upon one's perception of things. One experiences a degree of embarrassment about the relative unsophistication of the kinds of products one 'sold' as a relative novice: those unit-linked low-cost endowment plans which were all the rage in the 1980s, but which we now wake up screaming about in the middle of the night. The 'Capital Redemption Plan' (an Investment Bond, stripped out to fund a MIP), which was essentially a thinly disguised excuse for selling two plans when one would do. We had qualifying life policies (LAPR, anyone?) and non-qualifying life policies. We had those lovely, but hideously expensive full-fat whole life plans that have now all-but disappeared from sight. We had companies such as NPI which made such a big deal about their responsible with-profits strategy, and which then somehow evaporated into oblivion.
All those companies we used to rejoice in using - General Accident (guaranteed premium rates, and a really good FAR), Provident Mutual (the oh-so lovely Pension Assured Fund), Scottish Amicable (I can recall the local rep, collecting proposal forms from IFAs in a wheelbarrow), Crusader Life (Group PHI), Save & Prosper, MIM Britannia, Family Assurance, FS Assurance, Lucky Rabbits Insurance (just checking to see if you're awake)...
Some of these companies, we could think of valid reasons for using, but all of them have disappeared without trace. Most have been gobbled up by the consolidators. Often, these companies would come along with some kind of unique product which IFAs would jump all over, as it was different. The Crown Life hybrid final salary scheme with money-purchase underpin - did that actually ever work? Lots of these schemes were being sold by IFAs at the height of the contracting-out frenzy. Johnson Fry came along with the 'Hy-5 PEP' - I am pretty sure that this product never actually delivered, having spent years afterwards dealing with disgruntled clients. The S&P and AIG guaranteed funds seemed to lock clients into a kind of steady decline, with barely an uptick of relief for the IFA to appeal to later.
As IFAs, we'd do our best to keep up to date, although (as memory serves) most of that updating was in relation to products, rather than planning. Thankfully, the emphasis has moved away from this into a more sustainable and rigorous focus on the nature of planning itself.
However, it is helpful to recall that there may be some things which have survived the test of time. One of these is Axa's Distribution Bond (previously 'Sun Life', another defunct brand). I can recall a time, as a fledgling IFA, when there was scarcely a product question you could ask, where the answer didn't look something like the old Sun Life Distribution Fund. In fact, it was so successful, that everyone else started coming out with their own versions, all with distinct twists - L&G, Prudential, M&G ('Lifetime Income Bond'), Skandia, NPI. The measured progress of broker consultants into my office in the 1990s left behind a vast, tottering pile of Distribution Bond brochures, most of which ended up in recycling. Some I did try out (NPI, M&G), but actually nothing quite did the job of the original.
It is a strange thing to look back over one's professional life, and realise that a significant proportion of my better work seemed to involve the good old Sun Life Distribution Fund. Perhaps this is not so surprising - Tim Hale's excellent little book 'Smarter Investing' makes the point that investment solutions which fall into the 40/60 - 60/40 (Equity/Bond) continuum, are most likely to result in successful outcomes. Stuff that falls outside those parameters is, therefore, less likely to generate such consistent outcomes - and of course the Distribution Fund sits smack in the middle of that sweet spot.
All of which goes to underscore the undeniable truth that it's the quality of your advice that makes the difference, rather than, necessarily, your wizardry with the DeFaqto Engage database.