Desperate people in the insurance jungle: Fred Redwood only sold cover for a short time, but he saw quite enough of a murky world

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The Independent Online
I SPENT six months selling pensions and insurance for the Colonial Mutual Group in 1990. It was a revealing experience.

First, I completed a simple personality test to gauge my suitability for a sales post and passed with flying colours. Among the others who gained equally high marks were Derek and Ian. Ian was going through a messy divorce that he could not afford. Derek's building company had gone down the pan and he was harangued every day by builders' merchants and plant hire companies. I well remember the morning he turned up, ashen-faced, to announce that the tax man had sent him a bill for pounds 40,000.

These were the people who were expected to give best advice on subjects of vital importance to their clients. The reason they were in the insurance business was that it offered them the chance to earn, perhaps, pounds 1,000 commission for a night's work. It was a possible escape route from their monetary difficulties.

Lautro, the regulatory organisation for salesmen, checks that no insurance sales staff are bankrupt. It should also check that they are not on the verge of bankruptcy because both Derek and Ian were desperate people who could never be expected to give impartial and wise advice.

The training we went through was pretty inadequate. Our trainers sprinted through eight hours of lectures every day for five days. Little wonder trainees emerged from each session mesmerised by facts and figures.

We should not have worried about passing exams, though. When testing time came, the trainers left the room so that we could consult our manuals and sort out the answers by committee. I often wonder how many of my class of 1990 are still giving 'expert' advice to the public after that training course.

Now it should be stressed that I later learnt the Colonial Mutual Group is a well-respected, established company which, compared to others in the field, treats its employees well. Also, it has changed its recruitment and training a good deal since my stint. Colonial's training and recruitment manager, Alan MacGreggor, told me last week that the firm has abandoned its personality tests and now places far more importance on the financial and marital stability of potential recruits. It also looks for higher academic qualifications. The length of its training course has been doubled and it is making the product knowledge of sales personnel a priority.

Other companies are less careful. A friend, Robert (not his real name), returned from a stint in the Far East and with a few spare pounds in the bank could afford to take a gamble with a career change. He met the manager of a large, commission-only 'investments' company. When Robert asked about potential earnings, the sums earned by the group's top performers were read out. He was not told that these sales people were a tiny minority who were managers - earning a large part of their commission on the backs of junior agents such as Robert.

The Colonial Mutual Group was linked with teaching unions, and that gave salesmen somewhere to start, but Robert simply had the world rushing by to aim at. To make sales, he was taught the more devious tricks of insurance lore. A good one is to find out where there has been a sudden bereavement - preferably leaving the surviving family in financial difficulty. The agent then approaches the neighbours, and the advice given by the old hands was to 'push the coffin up to the window and let them smell the flowers'.

Another practice, requiring more nerve, is going to a pub to set up a scripted conversation with someone at the bar. The conversation establishes a pattern of positive responses. Then, after general inquiries about financial matters, comes the crunch question: 'Do you want to save (say) pounds 150 a month?' The response is almost guaranteed to be 'yes'. A meeting is set up and the agent has a good chance of making a sale.

Both Robert and I were able to redirect our career paths - he now works as a freelance graphic artist and I mix journalism with short-term teaching contracts. But the public cannot expect best advice when the 'financial adviser' desperately needs to make a sale. It is time the murky world of insurance and pensions sales was investigated.

(Photograph omitted)