Advice plan laudable, possibly lucrative Birds of prey

No doubt there will be plenty of proponents of both sides of the argument following the launch yesterday of a task force to ensure free generic financial advice for every adult in Britain within five years.

The initiative has certainly got a financial heavyweight to drive it through - Otto Thoresen, chief executive of one of Europe's biggest financial services firms, Aegon UK (including Edinburgh-based Scottish Equitable).

Thoresen's task force is charged with setting up the workable framework for a service by which consumers will get "quick, easy and simple access" to generic financial advice.

Although the service will be available to all, it is pretty clear that it is those on lower incomes, possibly with less sophisticated financial knowledge, who are firmly in the government's sights.

Rampaging personal debt in Britain, plus a massive pensions shortfall as the demographics of the country change, would make it churlish to suggest the scheme was without merit.

There is a widespread lack of understanding about long-term savings and investment products (think of costly fiascos, causing much consumer heartache, from pensions and mortgage mis-selling to split-caps and precipice bonds).

And, launching the initiative yesterday, Economic Secretary to the Treasury Ed Balls, made a good point that the current system of advice was flawed. Balls says correctly that many people just want to discuss their financial options in demystified language without the obligation to buy anything at the same time.

However, too often people go to a financial adviser and feel pressure to take out some sort of product just in tacit recompense for the time and effort individual financial advisers have put in on their behalf.

IFAs will have a point in saying that only a fairly basic advice service is likely to be possible given the wide-ranging "generic" remit of the government initiative. It is hardly likely to provide the level of expertise that a professional IFA can.

But this should not be a zero-sum gain between current existing financial advice and a national advice service under the government's aegis.

Both can do a job, perhaps the government template providing a basic introduction that would strip away the jargon and confusion that financial products often engender, with consumers then possibly being better equipped to go further and get more specialist advice with a greater degree of confidence.

Thoresen is known to believe that the financial services industry has a moral obligation to participate in initiatives that improve financial understanding and empower customers.

But he is also no bleeding-heart liberal.

Thoresen reckons such industry involvement will also have commercial benefits in the longer run.

He believes that if consumers know more about financial services and are not frightened by its seeming impenetrability this will eventually lead to the yellow brick road called Sale Of More Product.

HERD instinct among businesses is usually strong, so Smiths Group's decision to sell its aerospace division to US leviathan General Electric might spawn follow-ons.

Mid-cap aerosapace groups are now trading roughly a quarter below the admittedly full price paid by GE, and so further acquisitive antennae amid the sector's big carnivores will have been alerted.

So it was no surprise that, after the Smiths' deal, Meggitt shares closed up nearly 5 per cent yesterday and Cobham was up a little under 3 per cent. Even Ultra Electronics put on nearly 1 per cent.

Aerospace dynamics are pointing towards fewer but better-capitalised players.