When it comes to pensions, IFAs know better than anyone that it’s people that really matter. Xafinity’s Andy Bowsher on the importance of customer service:
“You’ll have to put a hammer through your window, sir….”
Not exactly the words you want to hear from your local garage. It’s a sorry tale, really. I’ve got a ‘well known German car’, which is now 13 years old. Unlucky for some perhaps, and I guess I should expect things to go wrong from time to time. However, to be fair, it has generally been, and still is, a good car – basically, the product is good. This particular German carmaker is a strong business that makes good cars.
But, why are they telling me to smash my own car window? Well, it’s all about service and trust. I run a SIPP and SSAS business that administers around £1bn of client assets, and service and trust are things that really matter.
The story is that the key fob is clever (well, for a car designed in the last century anyway), in that it charges itself from the ignition. Great, I don’t have to buy a new battery every year or so. But, perhaps not so great when the rechargeable battery eventually dies and the sealed key unit costs £140 to replace. Maybe I’m tight, but that seems a lot of money for a key. Anyway, if the fob fails, I just stick the key in the door, just like in the old days, and give it a turn and the door unlocks, and so off I go….
Until, that is, you stick the key in the door, give it a turn, and there’s a ‘clunk’, and it doesn’t open…..unfortunately, when the door lock breaks you simply cannot get in your car.
In this instance, when there’s a problem with the product, what you need is good service.
The Ultimate Driving Experience
OK, but in order to get the good service, I need to get into the car to drive it to work – and also to get to the garage to get a new lock installed. So, thinking laterally, I borrowed the wife’s car (at some cost to my wellbeing) and popped into the dealership at lunchtime to ask their advice.
The guy in the Parts Dept was surprisingly helpful. Not a single sharp intake of breath. He said we would have to break into the car to get it fixed.
“Can’t I just get a new key fob?” I wailed. “Of course you can, Sir,” came the reassuring news. “But (there’s always a but, isn’t there?), it won’t work until it’s been configured. By inserting it into the ignition.”
So how do I do that? Yes, you guessed it. “Smash the window, Sir. It’s £108 for a new one and 30-45 minutes for the engineer to fit it – £200, maybe £250 at the absolute maximum.”
“But I don’t want to do that….it’s….it’s my lovely car…..surely there must be another way?” “Well, Sir, if you can get to the door handle and open from the inside, you’ll be fine.”
Engineered to Move the Human Spirit
So there was my challenge. One I considered worthy, somewhat manly, and even a little bit ‘edgy’ for a pensions man. It’s a convertible, so in no time I’d learned that I could wedge the front/back windows apart to create a few millimetres of space. I could even engineer a metal rod that……well, maybe I should cut to the chase. After an hour or so I’d mastered a mechanism that slipped over the door handle and allowed me to pull.
Genius! I was so pleased. But, as they say, pride comes before a fall. The result was not an opened door, but a broken door handle.
Back to the garage. And following a reference to the actual mechanic, the parts chap announced that the door dead-locks, and that it cannot be opened from the inside under these circumstances. Excellent information, that, even if it’s a little late. Oh, and I haven’t mentioned that I’d been in and out of the dealership three times by this point.
Anyway, did you know it’s really difficult to break a toughened car window? But quite exhilarating, actually. Eventually a full-blooded swing with a hammer, followed by a minor explosion and some 3 billion shards of glass dispersed into every orifice of my car’s interior and my driveway.
Well at least I was in, and so off I drove to the garage. And specifically, to the ‘service’ department – who, once I’d rejected several attempts by the glamorous receptionists to force various exotic coffees on me – told me that they’ll sort it.
If Only Everything In Life…..
When I returned to collect my mended car (I assumed it was mended, but somehow they’d failed to return my two phone calls), I was in a rush. And there was the Service Manager, who promptly told me that my car would need its brakes replacing soon…. oh, and that it needed a new window (no kidding Sherlock) at a price of….. £330.
At my spluttering protest about the earlier £200 estimate he, personally, sanctioned a discount, just for me, to £300……
Somehow I failed to show too much of the required gratitude. Oh, and it turned out that they’d forgotten to look at the door handle. And they’d need to keep the car another day.
Friday came and went, and the car wasn’t ready. By the end of Monday they’d fixed the window but forgotten the door handle again. Eventually I’m left £600 out of pocket (oh yes, they tried for more), with a determination never to buy a certain German car again.
Good product, poor service, lost trust.
How To Do It Better
So, what’s all that got to do with pensions? Well, for me it’s a useful reminder of what really matters in a business. Strong financials of course, good product, and quality service from people who know their stuff. IFAs know better than anyone that it’s people that really matter.
Whether it’s your staff or your clients, if you lose trust you’re in trouble, ultimately. There’s no question that this lot at the garage get lots of things right, but in this instance they fell wide of the mark.
How does it go for providers? Well, the pressure on SIPP providers has been ramped up significantly recently, with the FCA capital adequacy proposals looking to hit some of them very hard indeed. There is also a huge amount of competition that has forced some providers into questionable positions. So, I ask myself, does my business pass the test?
Good product? Yes, at least I think so. Defaqto gives us a 5 Star rating for the full investment Xafinity SIPP, and an equally impressive 4 Star for cut-down SimplySIPP. We also offer the employer equivalent, the SSAS, with its unique loan-back facility that can be the life-blood of small businesses right now. But I need more than this.
Strong core financials? There is a shakeup underway in the SIPP provider space, and you don’t want your clients’ SIPP investments sitting in a vehicle that might not be around in the future. So we are fortunate that, unlike many providers, our capital position going forwards is not an issue. At a recent SIPP conference the industry audience seems to agree that the number of providers having to exit was very significant indeed – far higher than the 20% estimated by the FCA.
Good people? There’s no substitute for using honest hard-working people who know their stuff and can engage directly with clients. As our company grows, where we can’t get experience we employ only graduates with good degrees. And keeping the good people is absolutely key. It seems to work – we’ve been delighted by our staff retention, only seeing a couple of leavers from our 50-strong SIPP/SSAS specialist team in the past couple of years.
Strong backbone? Again, staying ahead of the game requires attention on a number of fronts. We’ve been vetting – and also rejecting – a good number of investments since we launched our SIPP in 2007. You can’t allow investments that might pollute the clients’ trust, or contain certain unapproved investments in foreign lands. TCF is built into Xafinity’s operating model.
Client trust? We survey all our clients and advisers regularly to take feedback. Of course I’m going to tell you it’s all excellent? Well, it is actually very good generally, and I do like to talk about these results, but it’s the negative stuff that catches my eye. It’s critically important to ensure that every client/adviser who has a negative response to any question is called by one of the management team, to listen further, to address the issue, and embed the learning. We don’t always get it 100%, but we work very hard at it.
Our group looks to live by the words ‘Professional and Proportionate’. OK, lots of businesses have these buzzwords, but I do like these two simple words that capture so much about any business with ambitions of sustained success.
Shaping Up To Examination
So if I subjected my car dealership to the same inspection criteria, would they pass?
Professional? Well, in many ways actually yes. They’re very well presented and polite. The Parts guy was friendly, and I felt he wasn’t after my money, but that he genuinely wanted to help. So, whilst his advice was actually poor (it led to a broken door handle), I’d forgive him a lot.
The Service Manager was super-slick – a bit too slick to engender my trust. He worked hard at presenting himself on my side, but I felt sure throughout that his job was to maximise the size of my invoice. Indeed, I’d have felt much better getting a quick chat with the mechanic (whom my Service Manager would have seen off if he’d ventured too near!)
Overall, it was a concern that they’d twice missed a real problem, the door handle, despite my having pointed the issue out to them several times – and accentuated by the fact that they’d found time to check my brakes in order to sell me something else.
Proportionate? Not in my judgement. I felt they wanted to ‘sell’ to me, rather than to listen, understand, and resolve my real issue. The eye-candy in reception would have been fine, but her real purpose appeared to be to create a diversion from what customers – or at least, this particular customer – really wanted, which was direct contact with the experts.
I didn’t need to have these people’s costs on my bill. And, as I say, I’d rather talk to the guy with the monkey wrench – or the laptop, anyway – than the middleman, whose costs once again, I’d quite happily remove from my bill.
That said, I’d love a bit of their brand!
Andy Bowsher is Director of Self Invested Pensions at Xafinity