Ever heard of the 80/20 rule?
20% of the things you do add 80% of the value. It is not an exact science. More of a concept. We try and apply it to Candid. Recognise where you add value and spend your time there. Admittedly, that wasn’t too easy in the early days when Justin and I were the only two full time staff!
But over time we’ll apply it more. Of course, the 80/20 concept cuts both ways. 80% of your time is spent achieving very little. Here’s a great example:
A very lovely potential new client got in touch about a variety of pensions that needed looking at. She completed Letters of Authority and the pension providers duly started sending us information. One of these is a firm called Countrywide. Countrywide responded promptly enough and sent us an almighty 43 pages of information. As well as not liking 80/20 concept, financial service companies are not generally great tree lovers either! Surely with so many pages no stone could be left unturned?
The document was largely pages of irrelevance, but it referred to there being a ‘guaranteed minimum fund value on the selected retirement date’. However, there were no details of what this guarantee was; the most crucial piece of information was not quite important enough to squeeze its way into the 43 pages! Nevertheless we could call their Customer Services team if we wanted to know more and this we duly did.
Jack called them and was told that the policy paid a guaranteed 5% p.a. and had annual charges totaling 2.25%. We asked if the 5% was before or after these charges were taken into account i.e. was it 5% or actually 2.75%. They didn’t know but could check with the ‘actuaries’. No, we could not speak with them ourselves but they would reply in writing within 10 working days. 10 working days later we reminded them. The reply was still somewhere in the pipeline but this person read Jack a section from a brochure and explained that the 5% would not apply as the pension was ‘paid up’ and no ongoing contributions were being made. This didn’t feel right so Jack asked them to email the brochure or, at least, the relevant section they had just read out.
He was told that was not possible as ‘their clients do not trust email’. They could, however, fax it (their clients evidently trusting fax not email). No fax was forthcoming.
Jack had a masterstroke. If they would simply give us a previous value on any given day then we could compare it to a more recent value and work out for ourselves if it was growing at a rate equivalent to 5% p.a. If only life was so simple. Countrywide could not give us a historic value.
Jack is getting to know them quite well by now. We learn that there are only 2 people on that team. Countrywide is basically an acquirer of old contracts – so their knowledge is wafer thin on each product. This team of two refer everything to an admin team – whose knowledge will not be a lot better – and they in turn contact other departments if necessary. But everything must come via these 2 people and I dread to think how awful their days must be. Weeks had now gone by and we still had no fax and no idea whether this pension contained a valuable guarantee. Jack was told he should complain to try and speed things along. We now know that if you complain they will acknowledge it in writing within 4 days, arrange a call to discuss it and then reply in writing …. within 4 weeks.
There have been numerous other calls. You’ll have to trust me that these are the much-edited highlights.
Anyway, having written off Countrywide as a faxing mess, a fax did finally arrive this afternoon containing the required information. A 5% (net of charges) guarantee does apply, so well worth retaining the pension until retirement.
Had we taken Countrywide at their word that the guarantee didn’t apply (rather than spend weeks persisting for a proper answer), it could have led to a bad decision. It’s frightening just how inept companies like Countrywide are, but then so are around 80% of insurance companies.