My father worked for the ‘Pru’, joining them after the end of WW2. The ‘Man from the Pru’ was him, a suited figure striding forward with that strange roof shaped umbrella logo. And income tax for him was at 98%.
This was the age of the mega (although that word did not exist then) insurer brands: Royal London, Norwich Union, Cornhill, Legal & General, Standard Life, Scottish Amicable, Scottish Life, Scottish Equitable (that’s enough Scottish-“Ed”).
Most were mutual. Nobody questioned cost, life office expenses, bonus levels, solvency, maturity pay-outs or even commission. The consumer had to rely on the integrity of the insurer and their way of treating customers fairly, which in those days seemed pretty good indeed, and not a regulator or ombudsman. And all without the technology of today, not even electronic calculators.
Endowment based investments performed well, unit trusts were around, you could buy stocks and shares via your bank, but the plethora of investment firms we see today had not really landed on UK shores until ‘Big Bang’ ‘rocked up’ on the 27th October 1986.
So, with the latest announcement from Prudential are we seeing a continued slow decline among the largest life offices or are we entering a brave new world?
I think neither.
That ‘BNW’ was enter in 1986.
I was working in the City at the time and the financial services world, as we knew it changed forever from that date. The late starts, long lunches, early finishes were no longer fashionable, everybody started dressing like Gordon Gekko, huge mobile phones were ‘hand borne’ not hand held, the colourful LIFFE boys would strut their stuff around the Royal Exchange between trades and generally life seemed to have a very particular and agreeable buzz.
Over the past 30 years what was once a rather staid gene pool of public school chums in pin stripes, a veritable gentleman’s club of friends and relatives, had morphed into a US-stylisation of business practices.
With it came dress down Friday, the skyscrapers of Canary Wharf and the City all linked with the considerable diversity introduced by foreign banks as plus points, but, the downside was that it came with a certain killer instinct that would mean even your friends and colleagues were not guaranteed a particular benefit without a cost attaching.
But in the post big bang world, as Mr. Gekko would say, “if you need a friend, get a dog”.
In the feeding frenzy Barclays paid huge money indeed for Wedd, Durlacher and de Zoete and Bevan, Deutsche Bank ate up Morgan Grenfell, Midland Bank (who are they) bought W Greenwell and this then got digested by HSBC. Kleinwort Benson bought Grieveson Grant, and NM Rothschild devoured Smith Brothers.
And what of the “Gentlemen and Players”?
Well they all retired to their stockbroker belt houses and country estates swapping pin stripe for tweeds, having “trousered” some very serious money.
With this sea change we saw the disappearance of those traditional and cautious values, my word is my bond, trust, nods, winks and tips were all to be replaced by what is now seen in many quarters as a strange mix of treating customers fairly, compliance, compensation, redress, learnings, reckless abandon, using somebody else’s money to trade on your own account for the benefit of the Banks who employed you and more importantly yourself.
So, the big life offices have gone the way of all flesh where they could not adapt to change
Is it a change for the better, well I am not so sure