Shelter from the sales pitch
Teachers have little professional use for the first and, if they believe their own publicity, no money for the second. Inured by decades of salaries disputes, they tend to believe that the only financial advice they need is how to lay their hands on some money to mitigate the shortcomings of their superannuation scheme and the inequities of early retirement deals.
Wrong, says Lesley Collins, principal of Teachers Independent Financial Services, who knows that a high proportion of teachers have money to invest. They are as likely as anyone else to inherit money or assets or to want to bequeath the fruits of their labour to their children rather than the taxman.
They are also very good savers, and low-risk-orientated. They are, in short, old-fashioned - clinging to a system that may still work in some countries, but which can be counter-productive in this: the papers that carry competing ads for pension plans also carry harrowing stories of careful people whose savings have been wiped out by the cost of care for themselves, their parents or dependants.
For decades now a variety of bodies have been campaigning for financial literacy to become part of the school curriculum. I can remember when "stocks and shares" featured in the arithmetic syllabus, alongside the equally forgettable formula for papering the walls of a room. Perhaps if pupils are to be financially literate, their teachers need to become so first - through experience.
So where is the advantage in turning to an independent adviser rather than relying on a bank, building society, insurance agent - or, serendipitously, on junk mail or newspaper ads?
"We offer a personalised, independent service," says Edinburgh-based Lesley Collins. "The first contact is a fact-finding mission - to find out what the teacher's circumstances and aspirations are. It is very easy to tell how adept they are in financial matters, and I don't want people saying to me, 'Just tell me what to sign'. I'm offering a renewable service, a friendly face and an understanding voice and want to see clients every six or 12 months to update advice.
"A lot of teachers may not be very financially aware. We have to nurture them through the bones of a contract, explain what is low-risk, what is medium-risk, and so on. They invest immense trust and loyalty in an adviser - and that is a two-way street. The one-stop sale is a thing of the past - a financial adviser who does that is not doing his job properly."
After the initial meeting, she researches the market, and then meets the client to say why she recommends particular products. TIFS is linked to the Exchange, in which every insurance, unit trust and mortgage provider's products are on disk. In addition, it is a member of DBS Financial Management Ltd, the largest national network of independent financial consultants. TIFS consequently receives daily updates on "best advice" and the benefits of this knowledge are passed on to clients. "This is the benefit that marks out independent from tied advice from the very start of the relationship," she says.
"The client's requirements generate, say, 20 pension plans. Then it is up to me and the client. But cheapest does not always equal best."
From the client's point of view, the new regulation that advisers must disclose commissions seems to be a considerable safeguard - but much more important to Lesley Collins is that companies have to disclose their charge projections.
"All of these things are taken into consideration when giving advice. If a product is recommended and generates a commission of perhaps Pounds 1,000, then surely it would be prudent to arrange that product through an independent adviser who will research the market-place and compare companies' projections and performance. Sound advice now can have a huge impact on a client's future wealth. If, however, the client objects to commission being paid they can then have the option of electing to pay an appropriate fee."
Lesley Collins started TIFS in December, 1992, after working for two years for the Educational Institute of Scotland's financial services operation. She came to that post from the independent sector and therefore had to adjust to a set-up in which she was required to give advice tied to one company's products. It was, on the face of it, a step sideways, if not backward - after about nine years in the insurance industry she had been inspired by the idea of independent brokerage and had taken the first steps to a career in that world. But returning to tied brokerage did give her a valuable insight into a specialised but fairly large market.
When she decided to start her own business, she was well aware that she was operating in a male-dominated profession (and one, moreover, where "financial adviser" is often just a new name for "insurance agent"). However, by the time she set out on her own she had worked with teachers for two years, knew their pension scheme inside out, and was aware of their various financial needs - "and the way they are bombarded from all angles by sales pitches", she added.
"A lot of direct sales people are being allowed into schools to sell personal pension plans, and some teachers have made the mistake of coming out of the Government scheme, against the advice of their unions. They thought, mistakenly, that the scheme was not worth its salt."
So presumably the big market for independent financial advice is the teacher approaching early retirement, reaching out for the lump sum and comparing it unfavourably with that of others? "In fact," she says, "it is everyone from the new teacher looking for ways of topping up his or her pension to the retiring teacher seeking to ensure that all pension monies keep working."
Nor is it just individual teachers who might be clients - schools now have large budgets to disburse - and invest. That, perhaps, is another story which will unfold as teachers and school governors become more knowledgeable about finance.