| Savings? Why bother?!
The UK Government is concerned that the rate of savings has dropped by 50% over the past few years. Why has this occurred?
The same Government believes that it is because charges on savings products are too high and that a discerning public refuse to pay them.
However, the Government has for a number of years (a similar period to the timing of the drop off of savings rate, funnily enough!) been forcing a reduction in those charges.
The result has been the demise of direct sales forces traditionally employed by many Life Assurance companies. No longer do we find ‘the Man from the Pru’ or wherever sitting on our settees at 8 o’clock at night suggesting we should start a savings plan.
Also, as Independent Financial Advisers (IFAs) earn very little commission from regular savings plans, they are forced to charge fees for their advice, which hitherto was apparently ‘free’. Most people are not prepared to, or cannot afford these fees.
The Life Assurance companies have focused their attentions on high net-worth clients investing single premiums.
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