“Our focus is entirely on our customers.” Well, except when it isn’t.

Of course everyone wants to be customer-focused, or -centric, or whatever.  But sometimes a problem arises:  we find ourselves with a choice between focusing on our customers, or focusing on ourselves.

Many – including me – would say that it’s the choices we make at these moments which demonstrate whether we really are customer-focused, or whether it was all, quite frankly, bullshit.

In the financial world, TPAS – The Pensions Advisory Service – is arguably more customer-focused than most.  (As a non-profit organisation, it’s arguably easier for them than for many.)

Pensions Freedom has thrown up some great opportunities for TPAS to become bigger, better resourced and more important.  As one of the chosen providers of the Government’s famous “guidance guarantee,” it’s picked up a big chunk of new funding so that it can deliver.

However, from TPAS’s point of view, a very troubling development has now emerged.  In the light of new research showing that TPAS’s impersonal “guidance” doesn’t help consumers very much and may quite often leave them even more baffled and confused, there are now proposals that before making certain decisions about their retirement savings, consumers should be compelled to take full-fat financial advice from a full-fat financial adviser, thus bypassing TPAS and having no need for its services.

There are various real problems with this, like who’s going to provide this advice and how is it going to be paid for.  But still, in principle, from the perspective of the consumer, it’s very hard to argue that it isn’t a good thing.

Unless, of course, you’re TPAS.  Seeing a chunk of their customer base – and no doubt a chunk of their funding – in danger of falling away, they’ve come up with a super-convoluted argument as to why compulsory advice isn’t a good thing, and why it would be much better if consumers took full-fat advice not because they had to, but because TPAS’s guidance guided them in that direction.

The argument is nonsensical – so much so that to be honest I’ve forgotten it – and just about the most transparently self-serving that I’ve ever seen.  It’s difficult to believe that any allegedly-customer-focused organisation could put it forward with a straight face.

Unless of course it was one of those moments where its own future success and survival temporarily came first.

Hey, advisers, are you sure you want this bloke representing you?

Many years ago, if for any reason any TV programme wanted a representative of the advertising industry for an interview, panel discussion or whatever, there was only one go-to guy in adland – the founder and then-boss of the Allen Brady & Marsh agency, Peter Marsh.  Whenever he turned up on Nationwide or The Money Programme or whatever, we all cringed.  Marsh was a stereotypical adman right out of central casting, with coiffed hair, heavy gold jewellery and a fast-talking, over-excitable style:  how much happier we’d have been to be represented by that lovely urbane David Abbott (recently RIP).

I can’t help thinking, or maybe hoping, that financial advisers will now be feeling much the same about the new self-appointed role of former trade body leader Garry Heath and his new initiative The Heath Report (www.theheathreport.com).

Heath is in every sense of the phrase an industry heavyweight, so I write this blog with due trepidation.  But I have to say that the sound I hear from his website is the sound of a dangerous, furiously angry and totally out-of-touch dinosaur roaring with uncomprehending rage as it slowly subsides into the swamp.

Maybe I shouldn’t comment on this, but I have to say first of all that I can’t ever remember reading a website with more typos and grammatical errors in it.  There’s even a typo in the main navigation.  And in the name of the initiative that provides its subject-matter (he calls it “Retail Distribution,” leaving out the word “Review.”)   You can judge the overall level of attention to detail from the last sentence on the home page, which tells us that his report is ” expected to be issue its first section in July with the final part issues in November 2014.”

The typos may be the equivalent of Peter Marsh’s horrible jewellery, but really it’s the content of Heath’s initiative which infuriates.  It does this in two main ways.

First, there’s the dishonesty.  He claims, repeatedly, that the purpose of the report is to “give a voice” to clients who have suffered from unintended consequences of the RDR – in particular, who have been “orphaned” as a result of their adviser choosing to leave the market.  However, in what he has to say about his methodology, there’s no evidence that he intends to engage with clients at all – his questionnaire is addressed exclusively to advisers.  And even in the list of seven questions he says he intends to answer, only one could be said to represent the “voice of the client” – he asks “what attitude to clients have to RDR?” although he gives no indication as to how he intends to find out.

But what’s really dreadful about his account of his initiative is its total, utter, hostility to every single aspect of the RDR, and its absolute conviction that all of its consequences have been entirely, 100% negative.  He’ll stop at nothing to maintain this position, twisting facts and slanting evidence to an extent that would be appalling if it wasn’t so ludicrous.

To quote a few examples of his forms of words:

–  Commenting on one of the most positively-received elements of the RDR, Heath accuses the regulator of “arbitrarily injecting new qualifications.”

–  Having been part of the IFA claque that heaped abuse and scorn on low-quality bank advisers for as long as I can remember, Heath now sheds crocodile tears at the scaling-back of many bank adviser forces – banks realised that RDR “compromised their offering and as a result most have drastically cut their adviser forces.”

–  clients who no longer have access to these formerly-despicable sales-driven advisers are left “victims of the unforeseen effects of RDR.”

–  when it comes to the “losers” from the RDR process, Heath claims that “The biggest group are those clients who no longer have an adviser – known in industry-speak as “orphans”. There may be as many as 10m of these.”  This is nonsense.  Leaving aside the fact that many of these advisers were a commission-driven disgrace to the industry, very few of the clients concerned will have had any kind of ongoing relationship with them  To clients, the huge majority of the advisers who have left the industry will be some dimly-remembered hard-sell product-pusher who flogged them an ISA (or more likely an investment bond paying 7% upfront) a decade ago.

–  On the same aspect, Heath claims he will investigate what will happen after January 2016 when “when many advisers who are currently living on servicing their existing trail commission clients lose that potential income.”  The reality is that the small minority who actually are “living on servicing their existing trail commission clients” will have few, if any, problems:  they will be easily able to justify moving to a similar ongoing adviser charge, paid out of the product in just the same way that trail commission is now.  The very large number who will have a problem are the many who are actually living on not servicing their trail commission clients, in other words taking their 50 or 100 or even 150 basis points each year in return for doing precisely fuck all.  They will not be permitted to keep on doing this, and if there is one consequence of the RDR that’s to be 100% applauded from a client’s point of view that’s it.

I could go on, but I’d get too angry and you’d start getting bored.  (What do I mean, start?)  And in any case, Heath’s website includes a questionnaire for financial advisers to fill in with evidence that supports his opinions (the first question, by the way, has five typos in it), but I hope and actually suspect that despite the PR coverage he’s getting, relatively few advisers will choose to do so.

It seems to me that there are two reasons why the very large majority of advisers will decide not to join the Heathosaurus’s last stand in that nasty sticky swamp.  For one thing, even by the standards of the many advisers who remain pretty hostile to the whole RDR thing, Heath’s views are too extreme:  those who’d happily sign up to half of what he’s saying would feel distinctly uncomfortable about the other half.

But for another thing, they’ll note that Heath intends to use the “evidence” gathered in his report to kick off a lobbying effort focusing on the FCA itself and the Treasury Select Committee.  And surely even the most RDR-hostile adviser can see that Heath’s utterly rejectionist approach, complete with confrontational language, false claims and twisted evidence, is absolutely no way at all to achieve any kind of positive engagement.

For proof, just look at the effect it’s had on me.  I’m neither regulator nor politician, and I do think there’s room for improvement in the post-RDR advice world.  But The Heath Report has got my back up big time.

“No, no, you go ahead and do that brain operation however you like.”

As we hold them up to scrutiny, more and more of the practices that we in financial services have followed since time immemorial start looking very peculiar.

One such is the way that private client stockbroking firms have typically left individual brokers free to design and manage their own clients’ portfolios.  These days, this has become so obviously a terrible idea that the few firms still defending it strike an extremely troubling note.

There’s a Redmayne Bentley ad in today’s Wealth Manager, for example, with the headline Is Bespoke Investment Management the future or the past?, and then a long sub-head which reads Are you an investment manager looking to break free from the constraints of ‘house models’, in-house buy lists and in-house funds?

It’s kind of amusing to imagine rewriting that sub-head in the language of other occupations and professions, and then envisaging how the rewritten version would go down with customers.  How about:  Are you a mechanic looking to break free from the constraints of Mercedes-Benz workshop procedures, Mercedes-approved suppliers and genuine Mercedes parts?  I think that on the whole those “constraints” are what attract customers to that workshop, and their absence would be much more bad news than good, don’t you?

Or, of course, the example in my headline.  Are you a brain surgeon looking to break free from the constraints of a hospital’s defined surgical procedures, selected suppliers and in-house resources?  If so, mate, there’s no way you’re drilling into this punter’s cranium.

Redmayne Bentley tell us that they have 40 offices across the country.  Presumably there are several of these constraint-escaping brokers in each of them.  I may be missing something, but I can’t think of a single multi-site business in any other industry which would be proud to announce that there are no “constraints” on the service and advice given either between or even within individual offices.

And the more demanding the expertise required, and the less we’re ready to believe that any single person could master it all single-handed, the more uncomfortable this freedom from “constraints” tends to sound.  We might not be too anxious to hear of a national shoe-cleaning business where each shoe-cleaner adopts his or her own particular approach and chooses his or her own combination of brushes, cloths and polishes.  But I really don’t fancy flying on a constraint-free airline where all the pilots fly their planes in whatever way they think best.

Of course I understand what’s really going on here.  The era in which individual brokers, flying solo, could run their own micro-businesses and choose their own level of remuneration is, thankfully, now rapidly coming to an end.  Most of Redmayne Bentley’s competitors are moving quickly to much more consistent, centrally-driven, properly-researched and managed models offering far less scope for the old-style gin-and-tonic brigade to carry on winging it.  And that being so, Redmayne Bentley is making a pitch in this ad to the surviving old-timers, with the message that over here it’s business as usual for the time being at least, and please would they like to come across and bring their nic e valuable clients with them.

And in fact, if you go to the Redmayne Bentley website, you’ll find that all this is pretty disingenuous.  The reality is that three of the four services described on the home page are centrally controlled and managed, and I wouldn’t be at all surprised if it’s all four within a year or two.

As I say, these days, the idea of the “constraint-free” investment manager, running a couple of hundred clients’ portfolios from a major investment centre like Beverley, Helensburgh or Shrewsbury (all sites of Redmayne Bentley offices) is peculiar and frightening in roughly equal measure.  Now that we’re all thinking about it – and especially now that the regulator is thinking about it – it’s an idea that’s disappearing at great speed.  Funny that it took us so long to get round to it, though.

Sod the consumer, let’s just concentrate on the FCA

I’m working on a new product which I can’t say too much about.  But for one of its applications – one which offers particular benefits to consumers – we need a business partner from another part of the industry.  Yesterday afternoon, we had meetings with three candidate firms.

I was expecting to enjoy this a great deal.  Although the subject of the discussions wasn’t the most gripping, being on the other side of the table during what’s effectively a pitch process is still a wonderful novelty for me.  But in fact, to be honest, it was pretty grim:  and for only one reason.  I’d say that 80% of all the discussion across the three meetings was about what would and what wouldn’t be acceptable to the FCA.

You’ll have to take my word for it when I say that nothing about the new product is controversial in any way – or at least in almost any way.  The one thing which is by definition controversial is that the product is different from anything currently on the market – and being different is a very, very tricky thing to be.

Some of the apparent regulatory issues are infuriating.  Others are simply farcical.  One of the potential partners expressed the view that the FCA wouldn’t like my clients partnering with a single firm, and would be much happier if we partnered with three and offered them to our clients as alternatives.  When asked how we should decide which partner to put forward to each client, the firm suggested that the best way might be by rolling a dice.

I’m sure I’m wrong to say this, but by the end of the afternoon I’d personally come to the conclusion that we’d be better off launching without the application for which we needed the partner..  Three hours of regulatory aggravation had pretty much eradicated my desire to do something new and customer focused.  In fact, my colleagues were made of sterner stuff and the project lives on.  But if three hours of regulatory issues is enough to kill my pioneering spirit, imagine how many thousands of innovations and innovators have lost the will to live when faced with the nightmare of Canary Wharf.

There are many things the regulator does which are necessary and important.  But the FCA pretty much annihilates the desire to innovate, and also the desire to communicate in a way which consumer can make any sense of.  And in those two respects alone, the regulator becomes the most dangerous and destructive agent of consumer detriment in our industry today.

If Hotpoint did financial

Channel-hopping during half-time in the Champions’ League games yesterday evening, I found Anne Robinson’s curiously-immobile fizzog looking out at me.  She was doing her consumerist Watchdog thing, and the story she was telling was not a pretty one.

Hotpoint, it seems, have been building several models of dishwasher that have a nasty habit of bursting into flames.  For six months Hotpoint knew about this but chose to do nothing.  Then, eventually, they implemented the standard (and I think statutory) product recall procedure, which involves running a smallish black-and-white ad in three different national papers and writing to any customers whose addresses you happen to have.

All this happened last year, and as a result it seems that about 20% of the owners of these inflammable machines have responded and had them fixed.  The remaining 80% – according to the programme, several hundred thousand people – are pretty much literally still accidents waiting to happen.

The programme was in fact using this Hotpoint story as an example of product recall stories generally.  Whether you have a car with brakes that tend to fail or a jar of jam that may contain glass fragments,  your chances of actually noticing a product recall campaign and doing something about it are typically about 15 – 20%.  It’s all a bit of a fiasco really – a token effort that makes very little difference.

Apart from making me check our dishwasher (no problem, it’s a Bosch) this unsatisfactory state of affairs triggered two thoughts in my mind.

First, I couldn’t help wondering whether it makes sense that the providers of, say, underperforming endowments or unexpectedly volatile funds should be under so much more of an obligation than anyone else when it comes to product recall campaigns. In financial services, after all, we usually contact and compensate the huge majority of our mistreated customers, not just 15 or 20 per cent – and doing so can cost many millions, or even billions, of pounds.   (This is not to say that financial services providers should be under any less of an obligation – rather that surely firms providing products that can threaten life and limb should be under more.)

But then second, since it was still a few minutes till the games re-started, I allowed myself to stray into a quick ponder on the nature of good and evil.  If I’d been a Hotpoint executive during those six months that I knew our machines could be lethal, would I have been happy that we’d decided to do nothing about it for as long as possible?  If I worked for one of th Big Pharma companies, would I happily take on the marketing for an extremely profitable drug that seemed to cause troubling side-effects?  If I worked for a Big Food company, how would I feel about marketing ready meals that contained many times more sugar than anyone could reasonably imagine?

The players were coming back onto the pitches, so it was time to come up with answers, not more questions.  For most of us, I decided, it all comes down to Stanley Milgram (see blog on 7th Feb):  his famous experiment, now partially but not completely discredited, says that most perfectly ordinary people will do horrible things if they think that’s what they need to do to please their superiors.

In consumer-facing businesses, despite the innumerable examples such as those I’ve mentioned here, it would be too cynical to say that we’re grimly determined to rip the customer off at every possible opportunity, and to take every single short-cut we can think of even when we know it means risking people’s lives.

But I don’t think it would be too cynical to say that if we’ve been given sales or other financial targets, and if our job security or pay rise or bonus or share options depend on hitting them, then when push comes to shove most of us are willing to decide that meeting the target is the priority, even if that does mean killing a few customers.

As I’ve said before in this blog, I don’t think the financial industry is any worse in this respect than any other, and in fact our capacity to do serious harm is a good deal less than many.  An underperforming endowment is bad, but it’s not as bad as a Ford car with a fuel tank so badly positioned that, as Ford executives knew perfectly well, it was likely to turn the car into a fireball in even low-impact collisions.

What we are, I think is much more closely regulated than any other consumer-facing industry – and much more obligated to offer recompense when our failings are found out.  If that system of regulation is still far from perfect, and if it misses some really big and important stuff and pounces much too enthusiastically on some utterly trivial and incidental stuff, I’m still in no doubt that having it is much better than not having it.

But best of all, of course, would be not needing it.

Twenty years later, perhaps my food retail analogy is about to make sense

It must be at least twenty years ago that I came up with the food retail analogy, mainly in an attempt to cheer myself up about the potential for brand development in financial services.

I’m not saying it was original – I’m sure lots of other people came up with it too, and probably for the same reason.  But I do think I came up with it independently, rather than just nicking it from somewhere.

Anyway.  “What is it?”, I hear you cry.  “You know perfectly well,” I say.  “It’s the analogy that says that if Tesco won’t give Kelloggs a gondola-end display without knowing how much Kelloggs are going to spend on advertising to encourage consumer demand, then before too long powerful intermediaries will be asking similar questions before recommending Standard Life or Schroders.”

For nineteen years and seven months, the fly in this analogy’s ointment has been the principle – and arguably the practice – of independence.  For as long as most advisers were independent, most were genuinely indifferent to the question of consumer awareness and attitudes towards the brands they recommended.   If they presented their recommendations with enough conviction, most clients would accept that unknown Skandia was a better choice than household-name Prudential.  And if the odd client did find it hard to accept this, the adviser could always switch to Prudential anyway.  The fact is, no-one was ever able to prove that positive consumer awareness and attitudes made any difference to advisers’ propensity to recommend – and without that proof, the food retail analogy falls down like a tin-can pyramid in a sit-com supermarket.

But now look at the whole subject again in the new world of restricted advice.  As we all know, “restricted” is probably the slipperiest term in the whole slippery history of financial services, making the average skating-rink seem more gripping than the new Dan Brown novel.  (Not a good analogy – most things are more gripping than that.)  But for many firms, “restricted” means choosing one, or at most a very few, manufacturers to provide a products of a particular type.  They’ll do a deal with, say, one provider of specialised annuities, or one provider of tracker funds, or three providers of income drawdown facilities.  And what’s more, these deals will often have several years’ duration, offering the providers market access, and effectively market share, far into the future.

Big restricted advice firms negotiating deals like that will be horrible.  They’ll demand everything they can possibly think of – most of all, of course, large quantities of money in whatever forms and guises are acceptable to the regulator.  But just to be on the safe side – just to make sure they haven’t committed themselves to putting forward a brand which some clients, even if only a few, have a problem with – don’t you think they might not start asking that same question that Tesco ask Kelloggs, “So what are you doing to make my customers want your stuff?”?


Adviser charging: it seems nothing’s changed. And yet of course everything has.

In the first report of its kind that I’ve seen, Skandia has said today that in the first quarter of 2013 around 97% of their clients have been paying their adviser charges out of the product – in other words, 97% of the time, Skandia has been paying the charges to advisers out of the clients’ investments, usually their cash accounts, rather than the clients actually making payments from their own bank accounts to their advisers.

To most of us, this is no big surprise – it is, after all, the business-as-usual option.  In the run-up to RDR, when it became clear that the FSA didn’t have a problem with so-called provider-facilitated adviser charges, the adviser community breathed a large sigh of relief (or at least those who weren’t hopelessly confused and mystified by the whole RDR thing did).  They realised that given that most were intending to set their adviser charges at pretty much exactly the same levels as their pre-RDR commission levels, things really weren’t going to change very much in real terms for their clients or for themselves.  Ultimately, at the minimum, the practical change consisted of adding a question mark to turn the key message on charges from a statement to a question.  “I’m proposing to charge you 3% upfront plus 0.5% per annum” became “I’m proposing to charge you 3% upfront plus 0.5% per annum?”.

That, I suspect, is the reality behind Skandia’s 97% figure.  And with that figure now available, many will say this proves that the RDR represents a quite preposterous amount of upheaval and cost in return for the addition of a single question mark.

In fact, though, I’d still argue that while the change is insignificant in practical terms, it’s hugely different in terms of defining the nature of the market.  The key is that it’s now the adviser’s client and not the product provider who, no matter how unwittingly, sets the adviser’s level of remuneration.  What’s important, ultimately, is not so much that the client is doing it but more that the product provider isn’t.  We all know that fundamental rule from game theory that in any game involving three players, two will inevitably gang up on the third:  the change in payment arrangements creates a strong probability that in the new world, it’ll be the client and the adviser who gang up on the product provider, rather than the adviser and the provider ganging up on the poor old client as for the last 25 years

If so – and it really does seem like a very strong probability indeed – then this at a stroke will amply justify the cost and complication of the whole process.  And elsewhere in the trade.media, we’re starting to see evidence that it is indeed the case:  for example, we’re already seeing signs of a major switch in recommended investments away from overpriced, underperforming active funds (which paid more commission to intermediaries) and towards much lower-cost passive index trackers (which have always been handicapped hitherto by the fact that they paid little or none).  Developments like this – forecast by me, I must say, about four years ago – are reported without much comment in the trade media, but actually there is a good case for some more opinionated journalism.  It wouldn’t be wrong to cover the story with a headline saying “Advisers decide to stop conning consumers out of billions in pointless charges and recommend some decent-value investments for a change,” although it’s not just the length of the line that makes me think I’m unlikely to find it in Money Marketing any time soon.

So.  It’s an unusual situation – pretty much unchanged, as I say, in purely practical terms, with advisers getting much the same amounts of money in much the same way that they have for many years;  but, at the same time, fundamentally transformed conceptually, in  a way that is entirely good for the client, bad for the provider and mainly just strange and different for the adviser, who has to start thinking of the client as, well, the client and not just the mug punter

Many say that when the FSA, or rather as it now is the FCA, starts seeing data like Skandia’s and realises what’s actually happening in the post-RDR market, they’ll be unhappy with the lack of practical change and will move towards an RDR 2 in which provider-facilitated charging is banned and clients have to make real payments of real money in return for the advice they’ve been given.

If the FCA is really determined to sever the link between products and payments – so that payment relates, and is unmistakably seen to relate, to the provision of advice rather than the arranging of products – then I can see there’s a case for this.

But if, on the other hand, the regulator’s main priority has been to end that deeply dubious era in which providers and advisers ganged up to the emormous detriment of consumers, without completely dismantling the existing financial services marketplace, well, I’d say it may conclude that so far, things are going rather well..

The six-year wait is over, and now….

It’s about six years since Callum McCarthy’s famous Gleneagles speech launched the process that has led to the Financial Services Authority’s Retail Distribution Review.  Well over 2,000 days later, it’s finally happened and we are now a couple of weeks (minus a Bank Holiday or two) into the Post-RDR World which we’ve spent so much of our lives anticipating.

(I said in a talk yesterday that I can’t remember spending anything like as long anticipating an event before actually experiencing it, or at least not since I was a teenager.)

Looking out of my office window, the post-RDR world doesn’t seem very different from the pre-RDR world.  It’s still pretty grey out there.  The Saatchi & Saatchi car park, which I overlook, is still full of disappointingly routine machinery.  The fish delivery man has just turned up to deliver fish (obvs).  Life, in short, is going on.  A faint suspicion is beginning to dawn that perhaps, not for the first time, in the run-up to the change we may have become a bit over-excited about it all.

There are those who think segmentation is easy, and those who know it isn’t.

As we run headlong up to the implementation of RDR at the turn of the year, the financial trade press is full of articles advising IFAs on how to develop value propositions that will be relevant to their clients, and profitable for them.

The advice pretty much always begins with the vital importance of segmenting the IFAs’ client bases, or client banks as they seem to prefer to call them, and the proposed segmentation is pretty much always on the basis of some kind of measure of value – either the value of the clients’ portfolios, or the value of the fees the clients can be expected to pay.

This is certainly simple, and at first it sounds reasonably sensible.  But in fact, “simple” and “sensible” rarely sit comfortably together in the world of segmentation, and I fear that such is the case this time too.

There are a bunch of quite important objections around the fact that the adviser may only have responsibility for a small proportion of the clients’ total wealth.  Imagine, say, that Warren Buffett had impulsively bought an ISA as a one-off transaction from an IFA firm.  He would undoubtedly fall into the least-valuable segment – the one to be offered an almost-insultingly poor standard of service in the hope that he’d take his miserable little investment elsewhere.  Which would be a mistake, obviously.

But that’s not really the point I want to dwell on.  My point is to do with the whole other side of segmentation – the side that doesn’t deal in the apparent simplicities of numbers, but deals with much more difficult and slippery subjects like attitudes and emotions.

The example I’ve been giving to demonstrate the orneriness and irrationality of IFAs’ clients is, in fact, me.  I read recently about an IFA who had decided that from January onwards, he would double the number of regular face-to-face review meetings with his clients from two a year to four.  And, what’s more, he would start sending out a weekly Market Commentary email as well.

He obviously thought his clients would be pleased, and, more importantly, that the news would make them happier to pay his Ongoing Adviser Charge..  But if I’d been a client, I’d have been horrified.  More meetings and a newsletter?  Benefits?  Au contraire.

If there are two things which really bug me in my life, they are a) too many meetings in my diary, and b) too many emails in my inbox.  No plan that involves adding to both is going to be welcome to me.  In my case, the benefit would be exactly the other way round:  the fewer meetings I have to go to, and the fewer emails I’m supposed to read, the happier I am and the more I’m willing to pay.  But I’m not sure if this point of view would make much sense to most IFAs, and I’m bloody sure it wouldn’t make any sense to the FSA.

There are of course other people who look very like me, only perhaps not quite as tall, who would be delighted to have four meetings a year and a weekly Market Commentary email.  Picking out the ones who’d be delighted, and separating them from the ones who’d be appalled, isn’t easy (although I can’t help thinking that when an adviser has a total of around a hundred clients, asking them what they’d prefer shouldn’t be an unmanageable task).

But that, as I say, is the thing about segmentation.  There are simple ways of doing it, and there are sensible ways of doing it.  But I’m not sure there are many ways that are both.

Hey everyone, I was actually right about something

A whole bunch of disagreeable livestock is gathering around the poor old Money Advice Service.  Exhausted by the savaging it’s taken ever since it was launched – actually, since before it was launched – it’s just lying there on the ground, not really moving, waiting for one of the circling wolves, jackals, hyenas and suchlike to deliver the fatal wound.

And here’s the good bit:  I told you so!  In fact, I told you so repeatedly, on the first occasion even getting in ahead of the first hyenas (or, you might say, actually being the first hyena).  Here’s what I wrote in this blog in February 2009, just before Money Guidance (as it was then called) went on its initial regional test up in the North-West of England:

” I think that no matter how it’s branded, marketed and promoted, the service will always struggle to maintain its focus on what its ultimate sponsors – the Treasury – see as its primary role:- encouraging more young mass market and downmarket people to put more money into long-term savings.  Trouble is, this just isn’t the guidance that most young mass market and downmarket people want to hear.  On the whole, they want and need guidance on day-to-day financial issues, particularly to do with debt.  It is mainly older upmarket people who want advice on savings and investments, especially now when they look with horror at the risks of investment and the hopelessly-low returns on savings.  In between young families panicking about mortgage payments, and retired people panicking about their investment income, I think the guiders will struggle to keep their eye on Alistair Darling’s ball, so to speak.”

And if that wasn’t prescient enough for you, how about this from two years later, when despite the extremely ambiguous results of the pilots it was decided to roll the scheme out nationally anyway:

“The lurking bear-trap in the whole Money Advice concept has always been that it’ll finish up spending a ton of money giving advice on the wrong subjects to the wrong people (especially the latter – the idea is not and has never been to offer free chats, coffee and biscuits to retired pensioners with large amounts of savings and too much time on their hands). The way the protagonist is presented in the commercial seems to me to give the whole project a big shove towards that bear trap.

Much as it grieves me to say so, I think IFAs are actually right to be pretty grumpy about this. The rest of us will have to settle for being mystified – except for a few cynics and sceptics, who may wonder whether, by deliberately recruiting the wrong user profile, those in charge are building a pretext for canning the whole thing in a year or two.”

I’m not sure if the whole Money Advice thing was ever do-able,but it certainly isn’t remotely do-able in the way it’s been done.  That’s a shame, I suppose, but it’s also an extremely telling demonstration – that the very same people whose job it is to tell us how we’re allowed to engage with consumers haven’t got the faintest idea how to do so themselves.