Hi there!

Last week, I gave a presentation to the sales and support managers of CFS. The division has been managed by Dennis Ryan (ex Barclays) for the last few years and Dennis has taken the distribution channel through some major changes as it organises and equips itself to compete in the challenging times ahead. Dennis is a charismatic leader with a disarming nature that is unusual in someone of his position. Originally from the North East, he is so ‘down to earth’ that his management team and colleagues ‘look up to him’! He has an open and honest approach that helps him to deliver and get support for changes that he has introduced – including a reduction in the adviser numbers from over 1,000 to 600 (with increased growth and profitability).

On one slide (of too many) that was part of the presentation about the market challenges – including the global and local economy and regulation (RDR etc) – I listed a number of bullet points to illustrate the economic environment:

My point was that it is too often too easy to focus on the negatives and see the ‘glass as half-empty’ (some see it as completely empty!). I gave a personal example of how we need to put problems and challenges in context – without ignoring them for what they are. I was relating a story about the challenges of having a daughter about to do ‘A’ levels and the pressure that I was placing on her to study in order to get the grades required by her University offer (I am apparently more of a ‘stress transferor’ than a stress owner). All of this paled into insignificance (well not quite…), when, after a week of racing heart rate (tachycardic) and two occasions when she collapsed, she was eventually rushed into hospital with what turned out to be ‘massive bilateral pulmonary emboli’ (two big blood clots on both lungs) that were causing significant strain on the heart and required urgent thrombolysis. My daughter has become a bit of a phenomenon due to the rarity of the problem in someone so young without obvious linking causes, but I am sure she would prefer not to have this notoriety.

The good news is that the advice and treatment by the experts seems to have worked and although still recovering with ongoing medication, the current status is less critical and worrying than three weeks ago. The point is that however difficult the situation, there is usually a way of dealing with it and in the context of other situations it may not be as bad as we first feel.

Going back to the presentation and the bullets on the various slides, we should remember that our industry often has the knowledge, skill and experience (and products) that can help consumers to manage or mitigate some of the consequences of the problems that the economy presents. We should be proud of what we do and positive about the value we create. As I said (not original) last week, ‘the only constant is change’! Our industry needs not only to cope with change, it needs to be resourceful and adaptable in order to ‘create positive change’.

We’re currently in the process of putting together a new report looking at all the solutions’ vendors and one of the interesting by-products of the research is the number of suppliers who are adding smartphone apps to their product portfolios. Companies like Distribution Technology, True Potential and others are really pushing hard the sort of services that are more accessible whilst ‘out and about’ with clients or prior to a face-to-face meeting.

There’s been a lot of noise this week around the manufacturers, with HTC’s new baby, the EVO 4G, selling out in the US and, of course, the Apple iPhone 4 being announced at Apple’s WWDC conference in San Francisco last Monday.

The AT8 crew are all iPhone 3G (or GS) users, and so I followed the conference live from the blogs and would describe the announcement as evolutionary not revolutionary, despite Steve Jobs’s spin. There are some real benefits to the new device:

• Bigger battery = longer standby/talktime – from a personal perspective, I really need this
• Smaller form factor – should fit in my shirt pocket even easier now
• Higher resolution screen – I’m looking forward to seeing this ‘in the flesh’
• Video Conferencing – using a new open standard called FaceTime and utilising a new front facing camera, but only using Wi-Fi at the moment
• Higher resolution camera – up to 5M pixels, with LED flash

I must say, it looks good, too – I like the metal finish and also the glass front and back, which should add to its durability.

The big question is, though, can it shake off the competition of an ever-growing adoption of Google’s mobile operating system Android, with it’s latest incarnation, codenamed FroYo, hitting the newer devices now – I’m not sure and Steve Jobs in his recent interview at the D8 conference, appears to shrug off the competition – certainly, Apple are manoeuvring away from Google, with the inclusion of Microsoft’s Bing and Yahoo search in the new iPhone operating system renamed iOS 4 – incidentally, iOS 4 can also be loaded onto some more modern iPhones and iPods, with it being available for iPad’s later in the year.

Anyhow, I’ve already approached my service provider, who gleefully tells me that I’m going to have to wait a few more days to get an idea of the UK pricing – once I have one, I’ll let you know my first impressions.

We have said in the past that the only constant in our industry is change. Well, we certainly have an abundance of change to contest with these days… the government (and its ministers), the economy generally, the stock and currency markets (prices can plummet as well as fall…!) and the ever present RDR.

Much effort and investment has been put into the Wealth and mass affluent propositions of most distributors as they come to terms with the need to charge (and justify) fees for advice. Much concern remains about whether consumers will pay fees for advice after the 2012 deadline and different interest groups are expressing conflicting views depending on their own position and motives. It’s worth remembering that consumers currently do pay for advice and whilst it is often still ‘disguised’ as commission, the reality is that after 2012, we will be working in a world where all investment advice (other than Basic) will require a fee to be identified and paid. When people ask if they would be willing to do so in the current environment, it has to be set against the context of the products current pricing and adviser’s remuneration method.

Post 2012, the price of the product will be the factory gate price and so will be different to what they would usually be charged today. The advisers charge will be specifically expressed as a monetary amount and if properly justified as being of value to the consumer, should be an acceptable price for what they get. Perhaps some advisers are struggling to justify the ‘value’ that their services give to customers and if so, they have either an education or articulation challenge (perhaps for themselves as well as the customer)!

I have heard Product Providers talk about how little they need to do to cope with the new environment, some see that they simply set the commission of the product to zero and that will be sufficient. I beg to differ, the new environment is going to be competitive and it will expose Product Providers inefficiencies in a way that they have not seen so far. They will need to innovate, make sure they add real value and deliver excellent service if they are to convince advisers and customers that they are the right choice.

Many advisers have started to review, re-engineer and improve their business propositions in readiness for the new requirements. However, just as Providers need to ensure that they are efficient and deliver excellent service, advisers will be competing to offer their services at attractive fees, which in theory can be compared by consumers as with many other commodities and services.

We have always said that technology has an important part to play, and whilst it is a cost to a business, chosen and implemented properly, it will deliver efficiencies and service improvements that help secure business and improve the bottom line.

Those who are fearful today are probably right to feel that way…they need to develop a clear strategy for not just how to cope, but how to prosper.