Brexit conspiracy theory, they thought it was all over. It is now.

Panacea comment for advisers and Paraplanners

13 Jun 2017

Brexit conspiracy theory, they thought it was all over. It is now.

Winston Churchill said, “The best argument against democracy is a five-minute conversation with the average voter.”

I have been reading a very interesting book by Sunday Times journalist Michael Hume called ‘Revolting. It is a tome exploring in some detail how the establishment elites are or might be seen to be undermining democracy.

Now I am not a big fan of conspiracy theories but I had a bit of a “Damascene conversion” today and I will share my thoughts with you.

Brexit is the new ‘Gunpowder, Treason and Plot’. It is Cavaliers and Roundheads. It is Braveheart. It has divided the nation and it is about to get worse. In fact so much so that it may end in civil unrest with the electorate ‘revolting’.

Here goes my very simple conspiracy theory.

The referendum produced a result that the establishment neither expected nor wanted. A bit like the Trump Presidency or even the resurgence of the Labour party in the last weeks of the election, depending on your political leanings of course.

When the Brexit result was declared, instead of triggering Brexit the very next day as he said he would, David Cameron resigned, buying the elites some time.

And with that the establishment wheels started to turn to ensure that the right outcome of that referendum would eventually prevail. Behind closed doors those elites that control so called democratic UK set in train a series of actions to ensure that outcome prevailed.

It would take a year or two but….hey ho, wheels with a precise function move slowly.

Establishment wheel 1: The conservative party needed a new leader. Strangely, after some very convoluted, overt Machiavellian machinations, Boris was sidelined (knifed) by Michael Gove, Theresa May won the contest on 11 July 2016, after the constructive withdrawal of the only other candidate, Andrea Leadsom, left her as the sole candidate without any vote needing to take place.

This ensured that a PM was in place who was a remain voter. She did not trigger the Brexit process either, feeling it best for the nation that a delay happened giving those elites time to start making some carefully calculated mischief. And that is what they did.

Court cases, more court cases, EU threats were all the hazards being put in the way to try and get some momentum to make the country think again, vote again- like Ireland (until they got the vote the establishment elites and the EU wanted).

None of this worked and in order to ensure that some clear blue water was put in view to keep the Brexiteers happy, on the 29th May 2017, Theresa May formally wrote to Donald Tusk announcing the intention of the UK to leave the EU.

Establishment wheel 2; The Brexiteers were now happy but there appeared to be no strategy declared to deal with the negotiations. Many said this was because there was no strategy.

That could be because the end game here is that Brexit as wished for by the majority Brexiteers was never going to be allowed to happen. To ensure that outcome a very cunning plan indeed needed to be put in place.

It would cost politically but that did not matter. It is/ was about country, about the elites who control UKplc and certainly not about the people or indeed politicians.

Establishment wheel 3: Theresa May, in thrall, possibly hock to the Remain elites had to take some desperate measures. She claimed that an election was needed to boost her majority to ensure the ‘right outcome’ for UK plc prevailed, giving her negotiating strength in Brussels.

The right outcome for the Brexiteers was so called ‘hard Brexit’. The right outcome for the elites was a soft Brexit or perhaps no Brexit at all.

Establishment wheel 4: The problem with boosting the majority was that this was the very last thing the elites needed. The polls were suggesting a triple digit majority that surely would see ‘hard Brexit’ the result.

But the elites cunning plan was on track, instead of setting the election date to fit with the local elections- the most obvious option for a so called ‘snap’ election, the date was rolled back several weeks to allow campaigning to take place.

Something that would definitely muddy those clear blue waters.

Establishment wheel 5: With waters muddied, Tiny Tim went to work on the Brexiteers, to little effect. The Conservative lead was still looking impressive and Brexit on track. Manifesto time for the elites was the ‘nuclear’ option’ and the button was pushed.

Establishment wheel 6: The so-called leaked Labour manifesto started the wobble the élites needed, more state spending on the NHS, infrastructure, free university education, nationalising the railways and utilities but it was still not enough. What was needed to ensure true chaos and a Brexit sanity sabotage was something almost unthinkable.

Establishment wheel 7: With a Conservative majority still looking at upper two figures the final act was played out. The core Conservative vote is the old. They actually go out and vote.

They have worked hard for a lifetime, paid into the system, gone through wars, plague, famine, pestilence, recessions and even a number of Labour governments are still live in their thoughts. All those strikes, union power, three-day working weeks. They would never vote for Corbin.

Establishment wheel 8: How do you stop that mindset? Simples. You produce your manifesto last and in it you lay the ground to take away all your entire core vote that as a party have strived to retain.

To add a bit of toxicity to ensure more Labour votes you propose to end the fox-hunting ban, refuse to rule out tax increases and bring back Grammar schools.

The result? Job done, electoral chaos, a country fed up with elections, a Prime Minister who has no power without DUP support and what’s more cannot resign without risking yet another election that Corbin might actually win.

Not quite the ‘Up yours Delors’ result for the Brexiteers anymore.

Michael Gove was on record as saying “I think there’s a grassroots feeling of being betrayed by the elites in some way: that the system is working for itself and not for the people at the bottom”.

He was right, but it has escalated further up the system now.

Just a thought, after all, what do I know?

Politicians and Pyrrhic victories

Panacea Comment for Financial Advisers and Paraplanners

12 Jun 2017

Politicians and Pyrrhic victories

As the dust settles on the political mess that surrounds us, I, like you no doubt, have been reflecting on what ‘learnings’ (that wonderful word that those who should be responsible trot out when they have messed up) have been coming out, a little before Thursday and now in the swirling dust cloud of verbal spin, catch phrases, excuses, retributions, pollsters and egos.

My own MP, a junior minister at the Ministry of Justice, visited me last week and expressed his concern that the Tory party had gone ‘off piste’ into danger.

In skiing parlance this was because the small group of skiers had no guide, had not listened to a weather forecast and had no piste map with them or even an avalanche safety device.

I tend not to be too political. This is because I have met a few MPs over the years, some on the TSC, some who were not. I have been amazed at their arrogance, general stupidity and lack of any knowledge of real life.

The nation today should be, in Hector Sants speak, ‘very afraid’.

Why?

Because it now comes to light that the government, since Brexit, has in effect been run by two unelected individuals. They have excluded many senior ministers and MPs from the formulation of policy, a campaign strategy and manifesto.

That is bad enough.

What is worse is what we find out now.

Not only do we have an idiot as PM, we have a bunch of spineless ministers who sat there and said absolutely nothing. Not even a whimper of discontent, in effect offering up a ‘Nurnberg defence (we were only acting on orders) in fear of their jobs in the next government that was expected to have a hundred plus majority.

And even worse, the post election complete lack of contrition. Today from Michael Fallon on the Andrew Marr Show, making possibly the best Uriah Heep impersonation I have ever see by a politician.

Readers of Charles Dickens will know that the character is notable for his cloying humility, obsequiousness, and insincerity, making frequent references to his own “‘umbleness”.

And this lot want to form a government to see the nation through the Brexit process?

Once again I am reminded of Bob Monkhouse’s quote about his career aspirations. He said, “everybody laughed when I said I wanted to be a comedian. They’re not laughing now”.

In this case think of Mrs May. Nobody laughed when she called an election that was not needed. Well, they’re all laughing now.

God save the Queen.

We’ve got to start thinking beyond our guns- those days are closing’ fast

We’ve got to start thinking beyond our guns- those days are closing’ fast

When contemplating the future of the financial advice industry, I can’t help but be reminded of the late sixties movie The Wild Bunch. Set in 1913 Texas, the film follows an ageing gang of outlaws looking for one final score as the traditional American West disappears around them.

Substitute the slow motion, multi-angle view of the world in 1913 to that of 2017, where our industry practices are on the cusp of potentially drastic change that could create uncertain future. Virtual reality now prevails, technology is king and in our world the day of the robo- adviser is nigh. But while I wouldn’t want to compare today’s hard working advisers to the dramatic personalities of The Wild Bunch, there’s an undeniable parallel between these characters facing retirement and some troubling figures around the future of the financial advice sector.

 

The current age demographic of the industry, based on our community analysis above of some 18,000 is certainly veering toward the older generation. New entrants to the industry as at Q4 2016 were lower that Q4 2015*. To make matters worse the number of advisers de-authorising in the same periods exceeded those joining*.

It may not come as a surprise that the number of financial advice firms currently being set up in the UK is also falling, with just 334 businesses authorized by the FCA in 2016 according to an FCA Freedom of Information request. It’s not hard to see a link between these dwindling numbers and the lack of fresh business ideas that is often brought about by bringing young talent into an industry.

Barriers to new entrants can be many and varied. Cost is a primary factor, especially for those looking to start a new business. From June this year the new minimum capital resources requirement of £20,000 comes into force.

For most smaller, established, firms it will be based upon the greater of £20,000 or 5% of the previous years’ income. This is in effect dead money and based on the £20,000 minimum, new firms would need to have a minimum year one potential turnover approaching £400k to warrant the lock up of this money.

Fees for a new firm add up quickly, freeze the £20k then add in staff costs, office costs, professional fees, technology, marketing. Possibly followed by an FSCS call. And then comes the need to find a paying client.

If you are moving from an established firm it is highly likely that there will be contractual restrictions placed upon you regarding client ownership and possibly a geographical restriction along with a time based one.

Put bluntly, all of this means that those seeking to create a new business are betrayed by the sheer cost imposed upon the entrepreneur, the ambitious, the wealth builders of the future by regulation. Rather like The Wild Bunch gang, our industry could well be on the precipice of extinction altogether. Is it any wonder then that we’re struggling to attract younger generations to the financial advice sector?

* Statistics based on Equifax Touchstone analysis of our database and CF30 FCA data

Compliance and the Stupidity Paradox

Panacea comment for Financial Advisers and Paraplanners

13 Feb 2017

Compliance and the Stupidity Paradox

Compliance is an important part of the whole world of financial services and indeed many other worlds of business and governments.

In the world of financial services regulatory compliance “describes the goal that organisations aspire to achieve in their efforts to ensure that they are aware of and take steps to comply with relevant laws, policies, and regulations.

The rules are well defined, as we all know, in the FCA handbook. For the avoidance of any doubt, the regulator has even provided an introductory guide.

Regulated firms must follow FCA rules. The rules it would seem are clear (to the author/s) but the interpretation and purpose of them at times makes little sense.

A book, published in 2016 by the City University of London called the ‘Stupidity Paradox’ investigated common sense in decision-making.

Professor André Spicer’s research included input from management consultancies, banks, engineering firms, pharmaceutical companies, universities and schools.

The ‘outcomes’ of investigations into the ‘Stupidity Paradox’ revealed many examples of when common sense decisions are simply ignored.

Examples included: 

  • “Executives who more interested in impressive power point shows than systematic analysis.
  • Companies ran leadership development initiatives which would not be out of place in a new age commune.
  • Technology firms that were more interested in keeping a positive tone than addressing real problems.
  • Marketing executives who were obsessed with branding when all that counted was the price.
  • Corporations that would throw millions into ‘change exercises’ and then, when they failed, do exactly the same thing again and again

I just love the last one.

Professor Spicer’s concludes by asking, “Why could such organisations, employing so many people with high IQs and impressive qualifications do so many stupid things”.

I am reminded of the definition of a camel. It being a horse designed by committee.

I have worked since the early 80’s in the industry thought six different regulators- NASDIM, LAUTRO, FIMBRA, PIA, FSA and FCA. The average lifespan of a regulatory body being some six years.

With the exception of the FSA transition, rulebooks, even staffing, for the predecessor bodies have been subject to rewrite and new hire, not a roll over. The FCA transition was a re-skin.

What does ring loud and clear is that regulators do not, in the most part, seem to learn from past mistakes. Not only are ‘learnings missing, they more often than not refuse to accept responsibility or blame for past mistakes.

The FCA is now approaching four years old. So, in theory only another two to three years to go until yet another metamorphosis occurs. In that time it has seen two chief executives and a significant turnover of very senior staff embarking on a journey working for the firms they used to regulate.

Regulation is an industry. The thousands of pages in the FCA manual require firms in turn to employ thousands of people with high IQs and impressive qualifications to interpret the rules and ensure that their business implements them to the letter.

FCA research from 2015 found that 88% of large firms and 44% of small firms increased the amount of time and money they spent on compliance and the cost of regulation, according to New City Agenda is some  £1.2 billion.

But, and here is the big BUT. The finer interpretation of some rules would suggest that rather like in the Italian Highway Code, red lights are a suggestion, some rules make no sense in their implication.

We would love to know what examples you have of the Stupidity Paradox in financial services regulation today?

The Stupidity Paradox: The Power and Pitfalls of Functional Stupidity at Work (Profile Books), by Mats Alvesson and André Spicer.

André Spicer is Professor of Organisational Behaviour at Cass Business School, City University London.

Mats Alvesson is Professor of Business Administration at Lund University and a Visiting Professor at Cass Business School.

88% of Advisers would not use an outsourced Paraplanner

Nearly nine out of ten advisers say they prefer to employ a full-time paraplanner as part of their in-house team instead of turning to an outsourced paraplanner, exclusive research from Panacea Adviser has revealed.

The survey of just under 90 advisers asked if advisers consider outsourced paraplanning an attractive option for their firm, to which 88% responded to the contrary that they currently favour having a paraplanner on board as a permanent member of their in-house team.

Less than 1% of advisers surveyed said they would consider outsourcing paraplanning in the future.

We believe that the Retail Distribution Review (RDR) expedited the already expanding nature of the Paraplanner’s role and made them a ‘must have’ resource for many smaller advice firms looking to maximise their earning potential.

Against this backdrop, we might have expected to see a sharp uptake in demand for both in-house and external resources, something which makes the lack of popularity surrounding outsourced paraplanners in our latest survey a somewhat surprising result. However, in our opinion, this does not suggest that outsourced paraplanners somehow have less to offer than their in-house counterparts, they just need to do more to shout about the time saving and other benefits that outsourcing can bring to adviser firms.”

INDUSTRY VIEWS ON PARAPLANNING

The research also gathered opinions of both paraplanners and advisers, highlighting some of the key challenges – and benefits – that using this type of external resource can bring for advice firms.

Nathan Fryer, Director of outsourced paraplanning firm, Plan Works, said:

“I can fully understand why advisers would be apprehensive about outsourcing work of this nature to a third party. In many ways if I were advising myself, and could afford it, I would most likely look to employ a full-time paraplanner too. After all, inviting a stranger into what is quite often an adviser’s “life work” can be bewildering. 

“It’s this that makes communication so key when it comes to outsourcing, explaining why many outsourced paraplanners actually offer a bedding in period for the two parties to get to know one another and identify how they can work together.

While it is also true that having someone in-house can assist with other tasks such as admin and marketing, paraplanners are actually becoming increasingly few and far between, which means that salaries are also being pushed higher and higher.” 

Morwenna Clarke, CFP from Portland Wealth Management, also commented:

“We actually have a successful outsourcing relationship with a paraplanner at present but, in the past, we have come across issues around data protection when outsourcing.

“It seems that some outsourced paraplanners contracts don’t cover the legal issues around protecting and storing customer data, which could potentially see the adviser breach certain European laws. Another issue that may deter some advisers from turning to an external paraplanner is the changing definition of what constitutes a ‘worker’ under UK law, which may make it difficult to work with an outsourced paraplanner.”

As with every element of your business, it is important to ensure when working with a third party that the proper data protection licences are in place and that advisers work closely with their outsourced paraplanners to identify secure ways of communicating and storing data. This should help overcome some concerns that advisers have around using outsourced paraplanners.

Panacea Adviser provides opportunities for advisers and outsourced paraplanners to connect via its Paraplanner Directory and at no cost.  Here, outsourced paraplanners are able to include business details and links to their own website – allowing them direct access to Panacea’s 19,000 strong community.

For more information on the Paraplanner directory please click here. 

A banking morality tale

Panacea comment for Financial Advisers and Paraplanners

20 Oct 2016

A banking morality tale

Wells Fargo Fined $185 Million for Fraudulently Opening Accounts.

The following first appeared in the New York Times last month and showed that old banking habits die hard. In fact the scandal was so great that the US Senate, House Financial Services Committee decided to intervene. 

For years, Wells Fargo employees secretly issued credit cards without a customer’s consent. They created fake email accounts to sign up customers for online banking services. They set up sham accounts that customers learned about only after they started accumulating fees.

September saw these illegal banking practices cost Wells Fargo $185 million in fines, including a $100 million penalty from the Consumer Financial Protection Bureau, the largest such penalty the agency has issued.

Federal banking regulators said the practices, which date back to 2011, reflected serious flaws in the internal culture and oversight at Wells Fargo, one of the nation’s largest banks. The bank has fired at least 5,300 employees who were involved.

In all, Wells Fargo employees opened roughly 1.5 million bank accounts and applied for 565,000 credit cards that may not have been authorized by customers, the regulators said in a news conference. The bank has 40 million retail customers.

Some customers noticed the deception when they were charged unexpected fees, received credit or debit cards in the mail that they did not request, or started hearing from debt collectors about accounts they did not recognize.

But most of the sham accounts went unnoticed, as employees would routinely close them shortly after opening them. Wells has agreed to refund about $2.6 million in fees that may have been inappropriately charged. 

Wells Fargo is famous for its culture of cross-selling products to customers — routinely asking, say, a checking account holder if she would like to take out a credit card. Regulators said the bank’s employees had been motivated to open the unauthorized accounts by compensation policies that rewarded them for opening new accounts; many current and former Wells employees told regulators they had felt extreme pressure to open as many accounts as possible.

“Unchecked incentives can lead to serious consumer harm, and that is what happened here,” said Richard Cordray, director of the Consumer Financial Protection Bureau.

Wells said the employees who were terminated included managers and other workers. A bank spokeswoman declined to say whether any senior executives had been reprimanded or fired in the scandal.

“Wells Fargo is committed to putting our customers’ interests first 100 percent of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request,” the bank said in a statement.

One Wells customer in Northern California, Shahriar Jabbari, had seven additional accounts that he did not consent to, according to a lawsuit he filed against the bank last year in federal court.

When Mr. Jabbari called the bank asking what he should do with three new debit cards he did not authorize, a bank employee told him to dispose of them, according to the lawsuit. 

Mr. Jabbari said in the lawsuit that his credit score had suffered because unpaid fees on the unauthorized accounts had been sent to a debt collector.

Banking regulators said the widespread nature of the illegal behavior showed that the bank lacked the necessary controls and oversight of its employees.

Ensuring that large banks have tight controls has been one of the central preoccupations of banking regulators after the mortgage crisis.

Such pervasive problems at Wells Fargo, which has headquarters in San Francisco, stand out given all of the scrutiny that has been heaped on large, systemically important banks since 2008.

“If the managers are saying, ‘We want growth; we don’t care how you get there,’ what do you expect those employees to do?” said Dan Amiram, an associate business professor at Columbia University. 

It is a particularly ugly moment for Wells, one of the few large American banks that have managed to produce consistent profit increases since the financial crisis. Wells has earned a reputation on Wall Street as a tightly run ship that avoided many of the missteps of the mortgage crisis because it took fewer risks than many of its competitors.

At the same time, Wells has managed to be enormously profitable, as other large banks continued to stumble because of tighter regulations and a choppy economy.

Analysts have marveled at the bank’s ability to cross-sell mortgages, credit cards and auto loans to customers. The strategy is at the core of modern-day banking: Rather than spend too much time and money recruiting new customers, sell existing customers on new products.

Wells Fargo markets itself as the quintessential Main Street lender, stressing the value of creating long-term relationships with customers over earning a quick buck.

But that apple-pie approach was undercut, regulators say, by a compensation program that encouraged employees to push the limits.

“It is way out of character for one of the cleanest banks around,” said Mike Mayo, a banking analyst at CLSA. “It’s a head-scratcher why so many employees felt comfortable crossing the line.”

In many cases, customers took notice only when they received a letter in the mail congratulating them on opening a new account.

Many of the questionable accounts were created by moving a small amount of money from the customer’s current account to open the new one.

Shortly after opening the sham account, the bank employee closed it down and moved the money back, according to regulators.

But Wells employees were still most likely able to get credit for opening new accounts in meeting their sales goals, the regulators said.

In addition to the fine from the consumer protection bureau, Wells paid $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles. The Los Angeles city attorney worked with banking regulators on the case. 

The bank stressed that the refunds have been relatively small — averaging about $25. The bank hired an independent consultant that reviewed tens of millions of accounts from May 2011 through July 2015.

The bank said it refunded money to customers if there was even the slightest possibility they were charged improperly because of unauthorized accounts.

“As a result of our customer-first methodology, we believe we included accounts that were actually appropriately opened and authorized by a customer,” the bank said in a statement.

Even regulators concede that the financial harm to consumers was not large. But the more troubling aspect, they said, was how the behavior reflected a broader culture inside Wells’s retail operations.

“Consumers must be able to trust their banks,” said Mike Feuer, the Los Angeles city attorney. “Consumers must never be taken advantage of by their banks.”

Stock of Wells Fargo, which is the largest bank in the country by market capitalization but fourth-largest by assets, rose 13 cents on Thursday, to $49.90 a share.

USA Today reported that “Wells Fargo CEO John Stumpf has agreed to give up $41 million in unvested stock awards following the board of directors’ investigation into the bank’s sales practices, the company said Tuesday.

Additionally, Carrie Tolstedt,

Wells Fargo’s former head of community banking, will forego all her unvested equity stock awards valued at $19 million and will not receive retirement benefits worth millions more. 

Tolstedt was responsible for the division during the time employees allegedly created sham accounts to meet sales targets. She has announced she will retire at the end of year.

And the footnote to this is that last week John Stumpf resigned with immediate effect. The California Department of Justice has launched a criminal investigation into Wells Fargo.

And while all eyes have been on Wells Fargo in the wake of the bank’s fake accounts scandal, Fortune Magazine notes that “there is another, not so apparent culprit at the heart of the crisis: the U.S. Securities and Exchange Commission.

Under SEC Chair Mary Jo White’s watch, the agency has failed to enforce disclosure requirements at Wells Fargo and elsewhere at a time when trust in big business has hit historic lows”.

And the lesson that UK banks should learn from this is?

And the lesson UK regulators should learn from this is?

I met her in a club down in old Soho

Panacea Comment for Financial Advisers and Paraplanners

6 Oct 2016

I met her in a club down in old Soho.

With the summer now well and truly over, some startling news emerged that women having NHS funded sex changes are also being given NHS fertility treatment so they can have babies after they become men.

The next step in this odyessy seems to be that the transgendered woman (now to be legally recognised as a ‘man’) whose frozen eggs have been used to create a baby should be ‘legally recognised’ as the child’s father, rather than their mother.

Still with me?

I reminded of the Kinks prophetic song ‘Lola’ and the line that goes Girls will be boys and boys will be girls. It’s a mixed up muddled up shook up world”.

We have schools setting policies for ‘transgender equality’ by way of gender-neutral uniforms and toilet provisions. Southampton University’s Student union is demanding that sanitary bins be installed in male toilets for transgender men who menstruate and staff at a Swedish kindergarten were told not to refer to children as ‘him’ or ‘her’ to avoid stereotyping.

Before anyone gets ‘offended on someone else’s behalf’, how common is the non-binary gender in the UK? This being defined as a person whose “self-identity does not conform unambiguously to conventional notions of male or female gender”.

The Gender Identity Research & Education Society (GIRES) estimates that barely 1% of the British population could be gender nonconforming to ‘some degree’. The numbers of trans boys and trans girls are about equal. That is some 640,000.

At the end of 2014, reliable figures indicated that at least 0.4% of the UK population defined itself as non-binary when given a 3-way choice in terms of female, male or another description.

That’s about 256,000.

To accommodate the needs and rights of this very small societal group, there are three UK Gender Recognition Registers, not by gender choice but by region (England and Wales together, Scotland and Northern Ireland) and anyone with a UK birth certificate who is issued with a ‘Gender Recognition Certificate’ is entitled to a new birth or adoption certificate, which is recorded in one of those Gender Recognition Registers.

As of the end of June 2015, since the Gender Recognition Act 2004 came into force in April 2005:

  • 4,631 new birth certificate applications have been received
  • 3,999 full Gender Recognition Certificates have been issued by the GRP
  • 183 interim Gender Recognition Certificates have been issued by the GRP (67% converted to full GRCs)
  • 193 applications have been declined
  • 110 applications are still pending

A 2014 survey found that 48% of ‘trans people’ under 26 had tried to commit suicide, 30% done so in the past year and 59% said they had at least considered doing so.

An interesting life insurance underwriting factor?

So irrespective of any readers personal views on the matter, which will be a spectrum ranging from incredulity as to how such a very small percentage of the population has developed such a powerful, possibly disproportionate influence, to the deep concerns felt by many that those affected can live in a very dark and confused place needing help.

The issues for the financial services industry that arise from this could be considerable.

The gender directive had serious cost implications for all insurance products, seeing the costs of protection for women increase to the same level that men pay, despite life expectancy being so different.

How will a ‘transgender’ or ‘non-binary’ be underwritten?

The Nursing Times highlighted 5 key points regarding ‘gender’ in 2015. They were:

  • Women have lower mortality rates than men, longer life expectancy, greater morbidity and are over-represented in health statistics
  • Some health problems are more commonly associated with one gender than the other
  • Sociological factors are as important as biology for determining gender-related health inequalities
  • Women’s natural reproductive function has increasingly been medicalised, leading to the increased need for healthcare

Germaine Greer got in a lot of trouble recently when giving a lecture at Cardiff University. She said“Just because you lop off your penis and then wear a dress doesn’t make you a ******* woman,”.

She has a point- genetically and chemically.

DNA (deoxyribonucleic acid) is found in just about all-living things and is the main component contained within chromosomes. It is the carrier of the genetic code that identifies the unique, distinctive and very importantly, unchangeable human male and female characteristics meaning that if you are ‘Arthur’, ‘Martha’ or travelling in-between, the transgender DNA remains as the definitive marker that just cannot be changed.

What about transgender underwriting for Annuities, Healthcare, Critical Illness, clearly a potential problem, particularly if ‘parts’ have been added or taken away.

LV= explained that “our underwriters take into account someone’s current gender. So if someone is transgender that will not be an issue at all, there is no additional loading or special treatment.

The only issue would be if they’re still having treatment (which is the same as anyone undergoing medical or psychological treatment), so if they’re in counselling then mental illness might be excluded but this is a general thing not specific to transgender people”.

Royal London said that “We are happy to consider all applications for cover for people who are transgender. 

Males and females will pay the same premium for insurance cover with Royal London, meaning that a customer can apply for cover as male or female depending upon their gender identity and not their biological sex.

If a customer has already had gender reassignment surgery and has made a full recovery with no complications, all covers including critical illness will be accepted at standard rates.

If the customer is due to undergo surgery, we will usually postpone cover until after the operation due to the potential medical and surgical complications, the same way we would for any customer awaiting any major surgery. But again, once a full recovery has been made with no adverse reactions to treatment received such as hormonal therapy, all covers including critical illness will be accepted at standard rate.. 

If the customer has any other medical history, this will be underwritten using our usual underwriting philosophy applied to all customers”.

Just Retirement’s view was that “ gender will make no difference to the price offered to the customer, as all rates are priced on a unisex basis. We offer customers the choice on how they are addressed.”

Male drivers pay more for car insurance than their female counterparts – despite strict gender equality laws – due to a loophole that lets firms charge more based on a person’s job. But what about the European equality laws, these did not seem to factor in- the ‘Lola’ driver?

Will non-binary be built into robo-advice algorhytmns and proposal forms?

With all this in mind, we hear that Oxford City Council is to add on it’s official forms the gender-neutral option of “Mx” as it considers whether all title salutations should disappear.

Even traffic lights have not escaped being politically correctly  re-engineered with the traditional green man sign replaced with LGBT symbols at 50 pedestrian crossings around the Trafalgar Square area in June.

And, what about dressing for work? The TUC is investigating gender-related problems associated with workplace dress codes and personal protective equipment (PPE). The probe follows reports of sexism related to work clothing, including stipulations to wear high heels, and the provision of ill-fitting PPE for women. A survey by the union Prospect found just 29 per cent of women said their protective clothing was designed for females. The TUC wants to hear of examples of bad practice, but is also keen to hear examples of good agreements and policies on dress code.

For my generation and that of my parents, it is a “very mixed up, muddled up, shook up” world indeed as the country appears to being subjected to minority influenced, politically correct socio re-engineering to accommodate less than 1% of the population. Goodness knows at what cost.

The world of financial services industry is already fraught with confusions, challenges and conundrums.

How will it keep pace?