The current political and economic environment could see friendly societies returning to their roots. Neil Armitage is a believer.
With rising costs and budgetary constraints facing state healthcare today, the time is ripe for exploring ways of applying mutual principles to this sector. This strikes a chord with people’s conscience, the mutual sector is growing in strength, despite the challenging economic times and today UK Mutuals are big business.
They account for £90bn in revenue every year and affect the lives of more than one in every three UK citizens; more than 25 million people are members of at least one Mutual.
As British consumers are demanding greater transparency and seek out socially responsible and financially viable organisations, the mutual core values of trust, mutual benefit and ownership ring true. In fact, Mutuals present a refreshing alternative to the perception of companies putting profit above all else.
Challenging year
2013 has been a difficult year as, among other challenges, advisers adjust to the new post-RDR environment. It is likely that some clients will view the new fee based model as unattractive and could lead some to end their relationship with their adviser in favour of a do-it-yourself approach.
To avoid losing clients, advisers will need to focus their efforts and attention on maintaining and developing their client relationships while continuing to offer their clients a compelling proposition, and the benefits of mutuality can help to do just that. Lack of size has proved no barrier to either innovation or the delivery of consistent investment returns.
Friendly Societies and Mutual insurers have adapted their heartland products making them suitable in today’s world; maintaining their focus on new product innovations that are designed around the needs of the customer.
Independent research commissioned by Foresters Friendly Society and conducted by YouGov found that four-fifths of the respondents no longer believe that banks are the safest places to invest their cash, with older and wealthier investors in particular feeling more secure with the prospect of entrusting a Mutual organisation to look after their money.
Nearly one-third (31%) of UK adults stated they would feel safest putting their money with a Mutual. Men (37%), those aged 55 and over (36%) and wealthier ABC1 social grade individuals (36%), including managerial, professional and clerical workers, were the most likely to express this view.
Mutual organisations and the differentiation they offer enable the financial services industry and the products it provides to its customers to remain competitive and provide an ever important choice.
