I remember, just after 9/11, listening to Clem Sunter speak about the choices that America had in response to the events that had just unfolded. Essentially, they had two choices, and the choice they made would define their future.
The choices were to open their borders and embrace the world and thereby reduce the threat of terror, or to put a “gilded cage” around America in an attempt to keep out the terror. We all know which option they chose, and how it’s turned out for them and the rest of the world. Anyone travelling to the US will lament their visa or border experiences. It is not a welcoming place and certainly not somewhere one can easily visit! And while it may give the appearance of being a safer place, the “cage approach” has not stopped terror attacks, and neither is the world a safer place.
“So what does this have to do with things financial?”, you ask.
Recently, Liberty Life and Discovery seem to have adopted a “gilded cage” approach to doing business*. I’m not sure if they are losing a lot of business, or if they feel threatened, or if they just believe that they are more important than they actually are, but both companies have adopted an adversarial approach to anyone requesting policy information (with the appropriately authorised documentation) for anyone who is not their client at either of the companies.
For example, Mr Sompantshe, a new client, comes to see us for a review of his financial affairs and some of his policies happen to be with Liberty and Discovery (among others). He tasks us to prepare a written review for him and signs all the appropriate consent forms authorizing us to get the information on his behalf that is necessary to complete the review. Typically, we would search Astute for his policy information and if anything was not clear (or did not show up) we would then send the consent form directly to Liberty and/or Discovery. In the past, they would send the information to us. Not so anymore!
In an attempt to protect their client’s privacy (or so they claim), they have now opted to defy the client’s instruction to provide us with the information. Instead, they have decided to send it directly to the client’s email address. The problems with this are obvious to almost anyone except Liberty and Discovery:
• Sometimes the emails don’t get sent;
• Sometimes the client’s email address is incorrect and the email goes astray (so much for protecting the client); and
• Sometimes only partial information is sent, and we then need to re-request it.
This has the following negative outcomes:
• It increases the cost of the review for the client (more time spent getting the information);
• It undermines the profession of financial planning as it is tantamount to both Liberty and Discovery acknowledging that the calibre of the average person with whom they are doing business is such that they would attempt to obtain information fraudulently; and
• It seriously impacts on any goodwill that we might have towards either Liberty or Discovery, to the extent that if there is a marginal call about either providing the client with a new policy or leaving the current one in place we would probably not keep the existing one (so long as the client is not prejudiced in any way).
What Liberty and Discovery need to realize is that our being able to draw up a financial plan for a client is not dependent on our having a contract with a service provider – we get paid by our clients for our professional advice. Their refusal to provide us with access to information that we have been correctly and legally authorized to receive, does not engender any goodwill towards those companies. It is equivalent to putting a gilded cage around their businesses. It’s a big wide world out there with plenty of choice and they, like America, are going to be the ultimate losers.
*there’s a certain irony that the names of both companies are the antithesis of the gilded-cage approach.