Editor's letter

What used to be called brand recognition is now creditworthiness, if you are a UK-based independent financial adviser. The conclusion was reached in a snap poll taken at the first in a series of IFA conferences arranged in the UK by Future Value Consultants. The survey, conducted via strategically placed electronic key pads, was taken at the end of the presentations, after the audience had been warmed up and had already asked some of their 'greatest fear' questions. As a result, the answers can be given a reasonable degree of credence.

The question posed was: what is the most important feature of a structured product? Faithful to convention and sense, the top answer - taking 44% of the vote - was pricing and terms. Acknowledging current fears about banks (now that the world thinks they can go bust) 25% of the vote was assigned to creditworthiness. A close third was simplicity, a constant bugbear for all of those who market structured products.

The most surprising number, though, was the mere 7% of IFAs who chose commission levels as the most important feature. A strangely small number for a body of professionals who many view as some of the sharkiest of sharks. Perhaps the muted response can be explained by suggesting that, in a relatively open forum, IFAs are always going to be on their best behaviour.

But more likely it is the shockwaves that are still rippling through investment finance as the credit crunch continues to nag away at profits, leads banks to offload staff and generally frighten those who do not have their money tucked away in a series of watertight deposit accounts.

Brand recognition registered a measly 1% of votes in the same survey. Although many of the questions asked at the conference revolved around creditworthiness, there were requests from the audience that issuing banks should be named on term sheets and documentation. At present, the practice in the UK appears to be to state the rating floor but not the name of the bank issuer. Those issuing banks present were relatively quiet, although one defended the practice by saying that, if his bank was named in the documents, then his team would face a stream of phone calls and enquiries, and he was not staffed up to cope with the extra workload. The only problem with his answer was that quite a few distributors just did not believe him.

Richard Jory, [e-mail]

[phone].