Sunlight is the best disinfectant
If you listen very carefully, all over Britain you can hear a faint tinkling noise as the penny drops. The realisation is dawning on people round the country that – whether it's in the field of MPs' expenses or their personal finances – they would like a greater degree of control, transparency and flexibility than they've had before, thanks very much. And that this means they need to engage more and relax less.
We see this shift everywhere if we look closely. The public fury over the 'redacted' official MPs' expenses lists. The swing towards simpler investments away from clever derivative-backed absolute return funds. The high cash balances. Even the move towards DIY holidays and 'staycations' suggests that people are retrenching; going to what they know.
At Standard Life we spend a lot of time studying various groups of customers – talking to them and to the advisers who serve them. And the strongest message we have heard in recent months is this: "I won't invest in stuff I don't understand." That's a simple message, but one which lays down significant and profound challenges for our industry.
In months to come you will start to see more and more from Standard Life to help you – as advisers – meet the clearly stated needs of your clients. Do they need or want to understand the finer points of Advance Corporation Tax? Probably not (though there's always one). Do they want to know how the product they purchase relates to their situation, how much they're paying for it and where that money goes? Absolutely.
As a stake in the ground for now though, we offer you our new-generation onshore bond – the Tailored Investment Bond (TIB) from Standard Life. This bond is designed with a built-in Customer Agreed Remuneration (CAR) facility allowing you to explain simply and clearly what the client pays for product charges – and what they pay you for your initial and ongoing advice. That CAR facility is highly flexible to help you construct a proposition which works for both you and your client – putting you both in control.
Although none of us know exactly what the RDR will do to product design in years to come, we have designed the Tailored Investment Bond with its principles in mind. We're confident that the product is flexible and sophisticated enough to deal with whatever RDR throws at us. We'll continue to invest in it to ensure you have a compelling onshore bond tax wrapper to offer clients for whom it is suitable. And you will of course, continue to benefit from Standard Life's renowned technical support and customer service.
Talking of investment, the Tailored Investment Bond has a wide range of insured funds available – somewhere around 140 at the last count – but we're not stopping there. Future developments to the product will include greater investment flexibility. We'll keep you up to date when we have more news available on that.
The Tailored Investment Bond continues the journey towards transparent, flexible products that Standard Life started with our SIPP in 2004. We believe we'll never stop developing; we will continue to adapt and lead the market by putting the changing needs of you and your clients at the very heart of our propositions. But for now, we offer you the new, 'un-redacted' Tailored Investment Bond. We're quietly pleased with it and we hope very much you will be too.
Full details of Tailored Investment Bond are on Synaptic now and your usual Standard Life contact will be delighted to go through it with you.