New Rules governing the process of buying insurance
On 1 July 2011, new regulations came into force, dictating the steps that must be adhered to when an Adviser deals with a Client. It is not that much different than the way we were operating prior to 1 July – the most noticeable difference is the amount of paperwork the client now has to wade through and sign off on.
Many people find it all a little over-the-top, but the process is dictated by law, now, so patience is appreciated. The Story below has been doing the rounds for many years (orginally English I understand), and is only intended for a laugh…but with good humour, it does illustrate a real point. The same principle can be applied to many other businesses and activities now. Enjoy!
Buying Shoes (if Shoe Sales were regulated in the way Insurance Sales are now)
Customer: “I’d like to buy a pair of black leather shoes, please”
Salesman: “Sir, if it were only that simple. Here’s my card and here’s your Buyer’s Guide.”
“What’s this for”?
“It tells you that I can only talk to you about shoes and allied products sold by this shop. I can’t talk to you about shoes sold by any other shoe shop, nor can I give any advice on, say, sausages, for example.”
“Probably the best way to proceed is to show you where we fit into the footwear industry. We buy in most of our products from the Far East at a fairly modest price and sell them on to the public at a considerably higher price; but of course, out of the mark-up we have to pay for transportation, import duties, rent and rates, display, staff, sales staff, cleaners and administration, etc, and our shareholders have to be paid a dividend out of the remaining profits. Not many people think about this when they buy their shoes, but we think it’s important. With this in mind, I’d like to ask you a few questions to make sure you get the shoes, or even boots, which are exactly right for you. It may be that when we have all the facts, I recommend that you do not buy my footwear at all. May I proceed?”
“What do you want to know?”
“Well, how many arms and legs have you for a start?”
“What have arms got to do with shoes?”
“Well sir, if, for example, you only had one arm and I sold you a pair of shoes with laces, that could be construed as bad advice by LAUSTRO”.
“What is LAUSTRO?”
“The Laced and Unlaced Shoe Trade Regulatory Organisation.”
“What do they do?”
“They put the boot in. A friend of mine had to leave the industry.”
“What did he do wrong?”
“He sold a pair of carpet slippers”.
“What’s wrong with that?”
“Turned out the guy didn’t have carpet. So you see, I need to build a full picture for you. For example, do you need shoes for business or pleasure, or business and pleasure? How many shoes do you have already?
“How many brogues, casuals, sports shoes, slippers, sandals, gumboots, etc do you have? How many suits? What colour are they? Do you have athlete’s foot? Can you touch your toes? Any corns or bunions, or does your family have a history of dropped arches? What kind of socks do you wear?
How often do you cut your toenails? How much do you earn and what is your overall clothes budget? ? Well, thank you for that information. I’ll give it some serious thought and- get back to you”.
Two weeks later…
“Good morning, sir. I’ve given serious thought and what you need is a pair of black leather shoes”.
“Isn’t that what I asked for in the first place?”
“With respect sir, you have now had the benefit of my professional advice, based on all the relevant facts as given, and you now know with some certainty that what you need is a pair of black leather shoes. All the guesswork’s been taken out of it. Here’s your Reasons Why letter. I recommend that you buy these black leather shoes because they’ll keep your feet dry, match your suits, look smart and you can afford them”.
“Well, I’m glad that’s settled.”
“You want the shoes, then?”
“Right, if you’d like to complete this application form, here’s your illustration, which I’d like you to sign. It shows a complete breakdown of costs.”
“Your Product Particulars describe in great detail how the shoes are made and the Key Features are a summary of the product’s particulars, highlighting the risk factors.”
“Yes. For example, if you live too long, the shoes may need repairing. On the other hand, if you die before you’ve had your wear out of them, I’m afraid there’ll be no refund, even if they don’t fit any other member of the family.”
“So, just to recap, you’ve got my card; your Buyer’s Guide; Product Particulars; Key Features; Illustration; Statement of Suitability. You will get a letter from the Shoe Manufacturer telling you that I am authorised to sell these shoes, and also a “Free Look” notice. You can return the shoes within 14 days and have a full refund if you don’t like them for any reason. Also, I just need proof of your identity, as you are not known to me and we need to establish that you’re not a terrorist…
Oh – and just one last thing sir, do any of your friends require shoes, and would you be happy to introduce me?”