People are taking more responsibility for their financial affairs. Linked products have capitalised on this greater individual responsibility. We also see growth stemming from the move to defined benefit contribution funds. On retirement, people tend to have a capital sum rather than a pension related to their salary and service years, and we are in a position to advise them on how this money should be invested. The remarkable growth of the linked-product industry wouldn't have been possible without the simultaneous development of computer technology.
Technology is an ongoing concern for linked-product companies.
Some linked companies took severe losses as they had to make good investor losses caused by the slow switching on their computer systems. Bryant speaks candidly about the future impact of technological developments. The problem with linked products is that by nature they are expensive to run. Technology changes so fast that in a few years it may be possible for pension fund members to have all these choices. An interesting technology-related development he refers to is the creation of an automated unit trust clearing system.