Category Archives: Business on the Web

Associated articles about running and managing a business on-line whether it is a business based exclusively online or it is your business represented on-line.

Car insurance in Spain – Linea Directa taking the piss?

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Car insurance in Spain Linea Directa taking the piss?

I sometimes think I’m a bit to damn nice.

I have had my car insurance with Linea Directa, Direct Line Insurance in the UK, here in Spain now for 3 or 4 years and its time to renew the policy.  Obviously times are tight so I wanted the best deal possible with no frills and additional expenses but covering the essentials for breakdown recovery and fire and theft and to make me legal to drive.

The best deal Linea Directa could give me was around 450 Euros and based on the ZERO claims I had made in the last year (and only if I paid that in one payment, not in a monthly payment schedule), but this quote only occurred after I asked about removing all the extra cover I previously had, even though I explained that I did not want any of this from the outset.

The guy from the call centre said he would call me back for my decision.

Getting another Car Insurance Quote

The thing is, something was bugging me, I just felt like I should not be paying this premium at my age (31 years) and in line with the car I drive, a 3 door Peugeot 206, 1.9 Diesel made in 2001.

I asked a friend what he was paying and he referred me to a local Spanish company called BMI, who sat me down, took my details and came straight back with a quote covering all the same features as Linea Directa for 260 Euros.  (Please forgive me on the numbers here, they are as accurate as I can make them, I have nothing on paper and am running on memory).

I was a little annoyed upon hearing this, not with BMI, but with Linea Directa, who I had given my custom to for the last few years and who I suddenly felt had been ripping me off.

Not being one to jump the gun and I decided to wait for them to call me back.  Sure enough the same guy (I will not mention his name, he’s just doing his job) called me back and asked if I wanted to extend my 450 Euros policy for the coming year. I proceeded to tell him that I had another quote for 260 Euros covering all the same features and asked if he could match that.

He told me he would have to defer to his supervisor.

Getting a new and revised quote

Sure enough, and surprisingly enough he called back not 5 minutes later. “Good News! I have spoke to my supervisor and we can match that quote because of your long term custom and zero claims in the last year Mr. Parks”.

Now correct me if  I’m wrong but why the hell was I not offered this much more competitive quote from the outset?

I asked him to call me later so I could consider my decision.

I am really annoyed about this and feel a little like I have been taken for a ride. I’m not going to slate Linea Diretas service, there has been no problems, their staff have been excellent, polite and spoke in English (even though I would have been happy to deal in Spanish) but the drop in price was, in my eyes, extraordinary!  Thats 450 euros to 250 euros in the space of 5 minutes.

Maybe Linea Directa do value my custom, but why then, do they make me jump though so many hoops to get the best deal.  Why not be straight, never mind the fact I feel now like they have taken me for a sucker the last few years at the previous premium, though I realise this is just a feeling, and then I was under 30 and the conditions have changed,but none the less, it leaves a bad taste in my mouth.

Regardless, its a nice reminder to shop around whatever you do.

So do I now say “thanks but no thanks” to Linea Directa. If you had been open, honest and transparent with me from the outset and valued my custom, then this quote would have been offered immediately, or do I just accept this as “normal business” and if you don’t ask you don’t get kind of practice.

Or do I change my insurance company and give the custom to the local company who offered me the best deal from the start….

What would you do?

What is the value of FREE and the cost of FREE

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So information utopia abounds here, today and now, on the internet, at the tap of a keyboard and the click of a mouse we can find, research and inform ourselves about any subject be it medical, historical, political, personal or professional. There’s no limit to the material we can find.

Combine this with making that information available in an efficient and simple way with search engines, social networks, RSS, email subscription, VOIP and streaming video it can mean the creation of something very beautiful…but there’s a catch.

Free information does not create the skills, the expertise or the ability, it educates about them.

I read a lot, as most of us do, but reading can only take me so far.  When it comes to taking that knowledge and putting it into practice only ability and experience allow us to follow through and achieve or complete a goal.

Let me give you some examples of when free information can only take you so far.

The pipes are burst in the kitchen, so you take a wrench and patch it up with some tape to prevent further damage and control the situation. Disaster averted.

Now, being the pro active individual you are, you let onto the internet and watch some videos about pipe repairs, read a few articles about the means and methods of plumbing, and purchase a list of tools and materials described as essential to do the job.  Then sit back and await the arrival of those orders so you can save some money and not have to employ a plumber.

You can guess where I´m going with this I am sure.

Save you money?  Are you insane?  Lets ask ourselves honestly here, will it actually save you money or is it the perception that you are saving money, because inevitably, the tools and materials will arrive and you hunker down and start rattling under the sink.

One massive and decidedly wet explosion later and you wake up in hospital after a near death drowning experience to be told by a smiling nurse that the neighbours are currently using your back yard as a swimming pool…and you need a new kitchen.

Nice.

OK I exaggerate (a bit) but you get my drift. Lets say it wasn’t the plumbing, say it was Gas or electricity, a much riskier prospect…would you be so confident to put life and limb at risk to save a few bucks, or would you prefer to pay and get the job done right, by someone with experience and the skills and qualifications.. yes, I thought so.

Would you do the same when your sick then?  Sure, the free information for checking out the symptoms and helping you see just how sick you are or may not be is all there but are you sure you want to diagnose yourself? No way! Your going to see a doctor who gets paid, by taxes, or privately.

Ok, lets step away from the life threatening stuff for a sec (Boooo!)

Lets look at investment.

Your a little cash rich (yeah right, not likely today, but anyway) you begin looking for some investment opportunities so you begin doing some research. Perfect, lets hit the internet.  You’ll have a good idea what you want to invest in, and where you want to aim your money and see your returns.

Now, do you really want to take the chance, in such a volatile market, with so many variables, to manage your own money or would you realistically go and speak to a financial advisor, who´s finger is on the pulse, who is dedicated to the sector and who has the experience (and the recommendations of course) to make a qualified decision.

They wont be free, that’s a fact, but the thing is, no matter what you read or how much free information you consume, you cannot gain the insight and experience that these experts have.

This is where it gets funny, and complicated.

The internet offers a vast amount of services and tools for free.  Just like any other industry or service though, as described above, many of us can jump in, read up and use these tools and services. But just because we read about it (and there’s LOTS to read) it won’t always mean you SHOULD do it.

Over the last ten years having worked closely with clients at all levels and putting their business on line the prevailing factor was always going to come down to cost and return on that outlay.  Some have strict budgets, some had money to burn but the question was always the same.

No one can answer it either, which is a major issue and because so many variations exist on how much these cost many are left bewildered and afraid of being ripped off or ending up paying out for nothing.  It is accepted though that any business will need a website to co-exist with it, its basically a requirement now to the extent that the site is included in the business plan (and creating a website should be based upon a business plan).

The end result though is, no matter if you do it yourself or pay for professionals the cost is time or money and neither is free.

When FREE creates dependence

When something is free we tend to use it and throw it away.  It has ZERO value. But that’s in the most part. If something is free and popular (think twitter) it has value but it also adds something else and that is dependence because we integrate its use into our lives.  This has worked very well for Google as well, who give away the vast majority of their products for free, things like Gmail, google docs and a multitude of other services.  All this creates dependence by us as we begin to use and rely on these products.

The problem and issue this raises has been noticed on a few occasions this year when both services mentioned crashed, went down for maintenance or where hacked.  Because they where free, no one really had the right to complain, but they did, because they where free no one had the right to support and because they where free no one was ultimately responsible, except for themselves.

But if we paid for these services then that would be a different story (and opens a whole other can of worms).

Again though, when you make the decision too utilise the FREE part of the internet, keep this in mind because ultimately, you are responsible (even when its not your fault) and you are the only person who cares.

The Free culture on line

Have a read at these posts.  They offer some insight into how free can work, but also how adding a cost against a product or service gives it friction and creates value and how we, the consumer, are willing to pay for products, in the most part, that bring something positive to the table.

2 interesting articles appeared this week regarding paying for twitter as a service the first from Twittercism and the second from Rishi Lakhani on Blog Storm.

The interesting point is that twitter is free, but people are willing to pay because when we pay for a service it also has benefits.  Remember also that twitter has no established business model at the moment for generating revenue and this sounds better than jumping on the old advertising bandwagon.

Finally,both Chris Brogan (yep, him again!) and Seth Godin made some interesting reflections and points about the Audacity of FREE and If Craigslist cost 1 dollar respectively.

The cost of FREE

So dont lets kid ourselves.  Free is a misnomer. NOTHING is FREE. and that’s a fact.  The decision about value is really at the heart of this piece, and how much you value your time to do what you need to do, against the value of paying for a service or product that will help you reach your goals.

Decisions, decisions (and yes they are not free either).

Independent Financial Advisors face compliance issues when using Social Media

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What seemed like a very simple questions was asked recently in a discusssion group on Linkedin and it went a little something like this:

Do any of you blog or use Twitter?
I am curious as to how much compliance is involved…..

Independent Financial Advisors face compliance issues when using Social MediaNow, the group in question was for IFAs or Independent Financial Advisor’s who are regulated by the FSA in the United kingdom (Financial Services Authority) and the rules of compliance, set down by Law, are enforced by the FSA who ensure that advisor’s do not over sell the potential benefits of their products or services with outlandish promises.

All well and good we say but the problem is confounding many IFAs in regards what they can and cannot do, mostly because the FAS has not clarified its position on blogs, social media, twitter, or facebook and the like.

This occurs because any publically written statement by a financial advisory business must pass compliance, otherwise large fines and even legal action may be taken so many find themselves having to ignore social media (and new technology) for fear of having their licenses revoked or getting creative with how they use the tools.

The simple answer is not to use social media to sell a particular product, as this would break compliance, but it can be used in a networking  capacity  to involve the advisor’s in groups and allow them to engage with users discussions and address the problems by understanding them in the first instance from a grass roots level.

Well, at least, thats why I was involved in the discussion, to try and research the views of IFAs on the social media frontier and how they where engaging in it.  Seems I still had to revert to explaining the social media itself though and await further feedback after the clarification.  Heres where we stand at the moment. ( I have removed all names because I wanted to… so there… and anyway its probably against compliance to even know or write the name of a financial advisor down so I’m making sure I don’t end up in court… I’m being serious, have you read their handbook?).

Question:

Do any of you blog or use Twitter?
I am curious as to how much compliance is involved…..

Answers:

First, a blog is an on-line diary. I personally do not think everyone needs to live my life with me through the internet.
Second, Twitter is used to mass email information to people.

Last, neither would be FINRA compliant if used to promote or carry on your business if you hold a license.
Short and simple answer.

Answers:

Answer One is right, and FINRA has come out and said that blogging, Twitter, etc., are all advertising, so you would have to get what you want to say pre-approved by your compliance department; impossible. So it’s not allowed, almost by definition.

Answers:

Why can’t you have a twitter account/blog where you talk very generically about what a wealth advisor could potentially do for a client? Compliance is going to have to come into the 21st century at some point, no? Prez Obama skillfully used social media to win the election…surely he will help our industry enjoy some of the same benefits? ( I can barely keep a srtaight face)
I do believe there is some gray area here, remember how taboo emails to clients were back in the day?

Answers:

All written communication must be pre-approved before sending out. Email through a wrench into the works, so firms are reviewing those after the fact. However, they have strict guidelines at to what can be sent and the approval process.

Right now, the industry has not come up with a way to deal with Twitter. In general, any email going out to 10 or more must be pre-approved. Twitter, by default, goes out to many at once. So, by our current rules, would have to be pre-approved before sending.

As you have indicated, it can be a very effective tool. But, its use could be a potential compliance nightmare. I cannot guess when this will change.

As far as sending out generic financial advisor commentary, that will surely lead to specific questions and business in our profession. It is too easily violated. I am sure we shall see changes as the technology advances. But, remember the reason for these restrictions. Too many times in the past people have fallen prey to and been hurt by incorrect dissemination of product information and promises of performance. The rules have been made to protect the consumer and the advisor.

I hope this helps.

Answers:

I think the idea is to raise your profile through networking, maybe letting people know what your expertise is and then they can contact you if they are interested in you. I would like to keep in touch with my peers in this industry to learn from their experiences. IFA Life is a brilliant networking group.

Phil Calvert says people buy from people, so raise your profile by joining groups and getting known in your working environment.
Yes I use Twitter, Linkedin, Business Facebook , Ecademy, Sagazone and Focus and a few local ones.

Answers:

An idea is to have a planned blog where you submit several blog posts to compliance for pre-approval and post them as needed. I believe the same system could work for twitter.

Answers:

If blogging and twittering are advertising, is it a violation to post here without prior approval? Perhaps the post-post rule used for e-mail could be somehow extended to generic posting.

Answers:

To answer that question, in part, most of what we do on LinkedIn is a violation of rules. For example, it is my understanding that any “financial advisor” who has a recommendation from someone on their LinkedIn profile is in violation of rules. Recommendations are not allowed for compliance purposes. At least that’s what a national compliance firm told me (I’m independent and hire a compliance firm to assist me with some stuff).

That said, I believe **** offers a great suggestion. If you have a compliance department, it would be relatively easy to submit a host of potential posts for approval. If they are approved you can post each of them over a period of time.

Hosting blogs and the like are perfectly compliant as long as the material posted is fairly generic and as long as you have the proper disclosures on your blog, twitter account, etc. In fact, I’m looking into establishing one for myself.

Justin decides its time to get involved:

First off I think I need to clarify a point before I join this discussion.

I recently requested permission to join this group with this exact question in mind that ***** ***** has begun. The reason being is that I have begun consultancy with a client who are an established name and offer independent financial advice and tax advice as their main services here in Spain and Europe wide.

Taking into account that the laws are different on a national and regional level I wanted to ask the members of this group if they are utilizing social media and if so what their experiences have been, both good and bad, positive or negative.

Unfortunately it seems that compliance is a major barrier to entry in this medium and that is an issue we are addressing at the moment for me to understand its restrictions and my client to understand how the on line tools available can or could be utilized.

Reading though the list of responses here I was however completely dismayed and feel the need to pipe up and maybe clarify a few points, possibly for everyone’s benefit, including my own, so please feel free to play devils advocate.

To address ***** ***** on your first comment. Blogs are renowned for being “diaries” and indeed to some extent they can still be referred to as that, however that is not exactly the case. Blogs have developed in the corporate and business environment to be a lot more than a record of person feelings and events, instead they have become a means to quantity and explain very specialist and specific subjects based around the experiences of the individual.

To clarify, if you where to have a blog *****, I would be very interested in reading and understanding your specific point of view on the last 12 months, the economic changes and the consequences of this on markets and currencies based on your own experience and expertise, much more so than reading some mundane report filled to overflowing with data and jargon that makes little or no sense to me as a layman.

By this very same process I would make the decision to monitor your blog via RSS subscriptions or email subscriptions for further updates because the information you are providing makes sense to me and engages me on a much more personal level than the previously mentioned statistical report.

Consequently I would would be able to, by the merit and quality of the information alone to decide to share this information with my networks, family or friends if I deem it to be of value.

This is where something like Twitter would come into the mix. If I decide to share this information I do so of my own free will and can immediately send it to X number of people because I want to share this point of view.

This is not mass emailing.

Far from it in fact, this is a very valuable network I have created with professionals and clients over a long period of time who will benefit from exposure to a more relevant point of view, namely yours, in this example.

You are not selling me (or the recipients/network) anything, no product, no service, no consultancy.

Ok, I tell a lie, you are selling me something, your inadvertently selling your personality, expertise and opinion. But your offering it for free. (I know that’s a double negative right there).

Following on from that, ***** has obviously offered a good work around that meets compliance requirements in regards submitting articles or information in advance, then once approved, publishing them via the blog platform.

Again this would work when we delve into the twitter community, because the compliance has been met in advance, then all you are doing is bringing attention to information that is available, and should be available, for them to read and digest.

In regards usage ***** ***** has the idea quantified correctly. It is about raising your profile and networking with a range of different social aspects, both peers and colleagues to laymen and business people. Surely you do this in the real world in B2B groups and business conferences or exhibitions? The virtual aspect is actually no different.

Please feel free to play devils advocate, if what I have wrote is in no way feasible or applicable, I admit I don’t know your industry regulations as well as the experts so am simply trying to understand the big picture and apologies to ***** *****, I am not intentionally focusing on you, but felt the points you made should be addressed.

Answers:

Justin,

Your points are valid, but the problem with our industry is that a few bad apples have ruined it for the rest of us. So, instead of penalizing those who have been misleading with their advertisements, regulatory agencies have blanketed all of us to abide by a set of rules which, intentionally or not, have made us less able to generate business through viable resources like blogging and using twitter or other social media.

For example, I’m not allowed to use any testimonials of any kind which is why my LinkedIn profile lacks any…or at least I’ve hidden them so they’re not visible to the general public, which is required in my case. Blog entries and twitter comments need to be pretty vanilla (according to the independent compliance firm I hired) because an abundance of opinions could be construed as investment advice which is not allowed unless we engage our clients in an advisory capacity.

Tweets and blog posts are considered advertisements and, therefore, we must abide by the advertisement rules our industry has laid out for us. Cumbersome? Yes. But it’s not impossible to overcome. It does take a tremendous amount of work to figure out the best way to attack it though.

Answers:

Hi Justin,
I was delighted to hear from you today. Thank you for all your advice. I will be contacting my network company Tenet, who do the compliance approvals, and find out more on this subject.

They are one of the largest networks that look after IFA’s. Maybe these guys can come up some ideas too as they will benefit when we do more business. Our industry should not be held back by age old regulations that could easily reviewed and updated.

As Philip Calvert (Marketing Guru) – IFA Life) say’s ” If your not on the train you’ll be under it”. People tend not to like change but we have to go with the flow or we will be left behind. Our industry is lagging behind and must catch up. I will be listening intently to all the other comments made on this subject and especially to tuned in to you Justin.  Thanks again.

Answers:

If I am interpreting your above comment correctly, you stole the words right out of my mouth. I can’t imagine financial advisors are posting and sharing thoughts on LinkedIn just to share “best practices” with other advisors? I’m sure you can sense my sarcasm. There is no difference between posting comments on a public website such as this one, and having a blog or utilizing Twitter.

Answers:

Right-on, *****.

I’d also like to flip the reg discussion (warning – I am an actuary too). I hate having to clear stuff as much as anybody. But I think it goes beyond the realm of “a few bad apples”. Finance is complicated. Beyond even Greenspan. A “little” peer review is good for the soul and for the end result too. So let’s flip the discussion and try to see how we can have our cake and eat it too.

And thats where the discussion stands at the moment.  Why have I bought this up?  Well I found the whole thing very interesting that the Financial Services where being held so strictly to the laws of compliance it was actually serviing to hold them back from engaging in new technology while, quite ironically, allowing other more “unscrupuolous” and unregulated finaancial types go unhindered.

I guess every industry will have its issues that it needs to face on the introduction of any new communication technology, but this one in particular seems incredibly complex and a little archaic. Will let you know more as I get further research completed but of course, if your an IFA and happen to be reading this, do feel free to comment here (if your not an IFA… well, im feeling generous, you can comment as well, so long as its sensible.)