Uberrimae Fidei – CeFA blog

This weeks budget set me thinking about my own families finances. The Governor of the Bank of England recently said in a speech he made in Newcastle that higher import and energy prices and taxes have squeezed real take home pay by about 12%, as a result, in 2011 real wages are likely to be no higher than they were in 2005.

Unlike the Bank of England I can’t print my own money and unlike the Government, I’m not allowed to tax other people. So what can I do to maintain my families standard of living? Putting it simply, I can try to make sure that my money is as conscientious as I am – Make Money Work. You work extremely hard for your money, make sure that it does the same for you.

Mortgage and financial advisers are ideally placed to help their clients, not only in the obvious ways of mortgages, investments and protection but when completing the factfind introducing simple, practical money efficiencies. Just as we now have life coaches, there is now a phenomenon for “financial coaching”; I and no doubt countless advisers have always seen ourselves as “financial coaches.

Delegates attending our CeMAP and CeFA courses are shown how they can save the cost of their training from their own typical finances but as I noted this week, there are always more easy ways to get your money working as hard as you do.

Like many people, when I set off to work along the motorways I find myself travelling at an almost constant 70mph. On my 40 mile journey to the office, my car gives me 40 mpg. With petrol now at £6 a gallon (£1.32 a litre for the more modern people amongst you), thus my journey to work costs me £6. However, if I think about it and cut my average speed to 56 mph, this adds just 9 minutes to my journey time but now my car gives me 52 mpg, a cost of £4.20 per journey. With a 5 day working week, I have saved £18.
The coffee that I enjoy usually costs £4.30 per jar and we manage to get through a jar a week. Last week our local supermarket had the same coffee on offer at £2 a jar. By buying a years supply (the coffee is vacuum sealed and can’t degenerate). Likewise, the shampoo we use usually costs £2 and last week it was reduced to £1, once again I bought a years supply. These two measures saved £171.
Each Saturday I go to sleep dreaming of what I’m going to do with the money I have won on that nights lottery. Each Sunday morning when I check my numbers in the papers I come back to reality having lost my £2 stake. Had I opted to place part of my emergency cash fund (just £1,000 of it) in to Premium Bonds, then statistically I would have a 39% chance of winning £25 and a 1 in 3,531,526 chance of winning the £1,000,000 that would answer my dreams. All the time my stake has not been spent and I can get this money back saving my £2 a week.
Go on any energy website and to a man they will all tell you, turn the central heating down by 1c and you can save 10% on your bill. Currently we spend £100 a month, that measure alone will save me £10 a month.
When it comes to the evenings TV viewing, myself and my wife are split straight down the middle. I always want to watch the football, whilst she like nothing better than drifting into a movie. But come the summer months, there is simply too much in our lives to sit in front of the TV. Thus from May to September, we move over from our package at £40 per month to the basic package at £19. This saves us £21 a month.

These simple 5 steps saves my own family almost £1,400 a year. Allowing for tax and National Insurance this is the equivalent of receiving a £2,000 a year pay rise. Couple this
with the money saving measures shown in the CeMAP and CeFA courses and it begins to make a real difference.

My grandmothers generation had a saying that has sadly lost favour in today’s world: look after your pennies and the pounds will look after themselves. It is a lesson that we could all do with remembering.

What did you get for Xmas? For myself, I certainly don’t believe that it was the gift of clairvoyance, nevertheless I will try to see into the next 12 months.

Inflation, currently 3.3% CPI in November, will according to many predictions, stay over the Government’s official target of 2% throughout the next year. This has also been hinted at by the Governor of the Bank of England, and if there is anybody in this land who really ought to know, then, surely it has to be the Governor of the Bank of England. I for one, will not argue against his judgement. Those of you who have, or are, studying for both CeMAP and CeFA will know that with inflation outside of the Government’s target, then interest rates must rise but as I will discuss later, I do not believe this to be the case at present. My best guestimate is that in December 2011, the CPI rate of inflation will come in at 2.7%. Of course, CPI is just one measure of inflation, there are indices for almost everything, including wages. Nobody would wish to let their wage increase be below the rate of inflation but in 2011 nearly all of all will be doing just this as the National Average Earnings Index, wage inflation, will be lower than either CPI or RPI.

House prices showed signs of recovering during the early parts of this year before slipping away slightly and I would expect more of the same next year. Like the tide, prices will ebb and flow, although not drastically before ending the year at almost the same point that they commenced it. For mortgage advisers this sounds like appalling news but I don’t believe it to be the case. October saw new mortgage lending hit levels not seen for many years, yet some 47,000 mortgages were completed and this figure was a bad month. Whilst house prices will drift and by implication mortgage levels will remain low there are two pieces of good news: affordability for first time buyers is at it’s highest level for over 12 years, this influx of new buyers will keep the markets ticking over and: as the world’s financial markets grow in confidence more longer term deals will be released, this will allow many clients who are currently stuck on comparatively high standard variable rates to re-mortgage into much more competitively priced deals.

Inflation and house prices / mortgages are inextricably linked to the interest rates. The only tool now used by the Government to control inflation is interest rates, albeit via the monetary policy committee, and by rights they should have already raised them. Putting it simply, the economy in its present state could not survive if interest rates were to rise either to quickly or to a much higher level. Whilst the nightmare scenario of deflation seems to have been slain, at least temporarily, the demon of inflation itself has not been tamed and the Bank of England can not allow it to run rampant for too long, therefore I can see base rates remain at their present historic lows until autumn and they will end the year at 1%. Many clients are finding it very difficult to understand why when base rates are at all time lows and have been for over a year and a half, that mortgage rates (and other personal borrowings) are still so high, again, I do feel that there is some small glimmer of hope on its way. As wholesale financial markets free up, re-mortgages will become much more attractive to borrowers, lenders in an attempt to maintain their current levels of lending will cut their standard variable rates back to more normal levels. Historically, standard variable rates have been approx 2% over the Bank of England’s base rate, today they are more like 3.7% over, very nearly double the “profit margin” for lenders. Don’t expect a flood but it will start to happen.

Shares and stock markets across the world have had a very good year, our own FTSE 100 up almost 11% over they year and very nearly 25% since it’s low point in July – timing, as ever, is everything! This was to be expected as markets, particularly the stock markets look forward and not at the present when deciding what to buy and sell. Hence, the markets are very good at forecasting recessions and recoveries long before they actually arrive. Very few market watchers believe that we will go into the dreaded “double dip” and that generally, the world’s markets will continue their recovery phase. Naturally, do not expect a smooth upward climb, there will remain a lot of volatility, especially in the first 4 months, I do not believe that we have seen the last cries of desperation from some Euro members. With the FTSE 100 at 6,000, I believe that we will see a year ending figure of 6,400, a rise of 6%, not bad when return from cash will remain in negative real terms and when including the average dividend return of approx 3%, this will give a total return of 9%. It’s easy to see on these forecasts why collective investments via financial advisers will do very well this year.

Latest forecasts on the job front indicate that the public sector only will shed some 120,000 jobs thanks to the announced cost cutting restraints. It would be a brave man to believe that the private sector can replace all of these losses in a short time frame. Like many sectors, financial services will be a difficult place but, in our sector there are going to be many opportunities occurring. On mortgage advice, the FSA have decided that all advisers must now hold a level 3 qualification, CeMAP or the CII equivalent. Some people currently working within the industry will not wish to take the necessary exams leaving a gap for those holding the qualifications. For those who do hold CeMAP, level 3, there is the opportunity to advance their standing and income by taking the new DipMAP, once again this will leave positions unfilled as these newly qualified people move up the ranks. For those giving financial advice this will be a huge year of opportunities. It is expected that thanks to RDR, approx 25 – 30% of the existing adviser force will leave the industry within the next 12 months. They will not be leaving because they are not capable of stepping up to the new level 4 mark, they will be leaving as many of them have been taking exams since the mis 1980′s and hav esimply decided that now is the right time to enjoy the rewards that they have been working towards over all these past years. Existing advisers have until the end of 2012 to complete DipFA and new entrants 30 months to do so.

As I said at the start of this blog, I’m not a clairvoyant, if I knew what was going to happen tomorrow, that would be a different story!

HAPPY NEW YEAR

This weeks blog is going to be very short. It’s theme is my reward. I run Uberrimae Fidei, a financial services training company, specialising in helping people pass their professional qualifications, CeMAP, CeFA, DipFA and Advanced CeMAP. Delegates pay for their training, the company makes a profit and as the proprietor I get rewarded. In the words of a famous meerkat – simples!

Not quite. Yes, I have to admit we run a company and a company does have to make a profit, but money is not the sole motivator for most people, particularly for many people involved in passing on knowledge. Like all professions, financial services requires supervisors and managers. Part of the Advanced CeMAP course is concerned with these skills. One of the areas that is studied is motivation and managers and supervisors come in to contact with the theories of Maslow and Herzberg. Once people have satisfied their basic needs, food, shelter, order etc , then according to Maslow’s hierarchy of needs other needs become important, leading finally to what he described as self – actualisation, the fulfilment of personal potential. That sounds like a lot of woolly social babel, so what does it mean in English? Basically, it means that once we have the material things in life that we need, other personal aims become both important and achievable. For trainers and teachers, this involves seeing others (delegates / students) achieve their aims.

Recently we have had feedback from our delegates and I wanted to share, briefly, five success stories.

Mr A, an estate agent from Scotland wanted to move purely from selling to helping people with their finances. Although he had worked on the periphery of personal finance, he would be the first to acknowledge that there was much he did not know. During the summer, he attended our full CeFA course and this week he starts his induction training as a financial planning manager with one of the banks.

Mrs B, was a bubbly character who throughout her working life had enjoyed meeting people and the sales process. Other than being involved in arranging her own mortgages over the years, she had had no knowledge of financial services. With younger children, she was looking for a job that would give her the flexibility to work the days and hours to fit in with her family. She passed the full CeMAP and is now happily and successfully working as a self employed mortgage broker in a local office.

Mr C, was like many young men, affable, confident and keen to see the world. Being single, he wanted to experience life in other cultures before returning home to settle down. His CeFA qualification saw him being taken on by a company with offices throughout the world, dealing with ex -pats. After a short stint in Kuala Lumpa he is now fully enjoying life in Ho Chi Minh City.

We know that sometimes, not very often, people attend a course and then decide themselves that a career in financial services would not suit themselves. At Uberrimae Fidei, as well as helping people pass their exams, we also take time showing them how to make the best use of their own money and how to make money work as they are. Mr D, was one such person. In his early fifties he had just been made redundant after many years working for BT and thought that this would be the catalyst for a change in career. On the course he had a change of mind. Despite not taking the exams, shortly afterwards he attended an interview for a large organisation in their finance department. The interviewer was much impressed by Mr D’s knowledge of everyday personal finance, knowledge he had gained from the course and offered him the job.

Mr E, from the west country was young and worked as a refuse collector. On the face of it, not a good start for someone who wanted to work in the world of finance. What he had was desire and a drive to achieve what he wanted. Using our experience and services, together with his own hard work, he passed all 3 CeMAP exams. This week, we learned that he had been taken on by a high street bank as a customer adviser. The bank’s HR department had been impressed by the fact that he had pushed himself for a huge change of career. Now, within the bank, all the doors to a career that he wants will be open.

So, for training companies such as ours (and many others), the monetary rewards as Herzberg states is an important aspect but perhaps more so, is the fulfilment that people you have helped are achieving their own goals, just like Maslow predicted. Simples!

One of the benefits about being a smaller, bespoke, training provider for financial services, is the ability to be flexible when meeting the requirements of your clients. This can vary from providing training for 12 experienced independent financial advisers to help them get through the new level 4 qualification, DipFA, through to providing specialist one to one training for those very new to our industry.

Although we believe in training on a residential basis, for many reasons; the industry nearly always trains on a residential basis, no need for travel delays and the benefits of being away from every day distractions; training courses for financial qualifications such as CeMAP, CeFA and DipFA are easily transportable. Indeed, whether we are going to Bolton to help a small group or, as we have, to Stoke for a one to one for a lady with a young child, it’s a simple case of packing up the slides, making sure we have all the right papers and travelling. However, even we were pleasantly surprised to be asked to go to Spain to teach CeFA.

The prospect of having to leave a cold, wet, dark England to go to to southern Spain where the temperatures were pushing 30 degrees centigrade left us with a difficult decision to make. To be fair, the difficulty lasted all of ten seconds. After completing all of our normal preparation work, agreeing dates, sending out our “Making Sense of Money” guide (essentially the IFS CeMAP / CeFA 1 manual condensed and in English), we soon were on our way.

Putting the course on to CD’s meant that it could easily be delivered to the three delegates via their own laptops, with no projector or wipe board to worry about we sat comfortably in the lounge disseminating the wonders of personal finance. Naturally, being Spain and in 30 degrees, there were occasions when we sat around a pool disseminating the wonders of personal finance!

Last weekend saw the Hop Festival taken place here in Faversham. The streets as always, were thronged with people from all over Kent and the south making their way from venue to venue past more morris dancers than you go throw a stick at, to watch the bands performing in the streets.

Nearly every pub in the town either has a stage outside in the streets or a band playing in the bar and the music played caters for all tastes from jazz, to rock, to classical to folk. Whatever your tastes, it is meet somewhere over the weekend.

From a personal perspective, what made this years festival so memorable was the number of people who had attended our CeMAP and CeFA courses throughout the year and then made the effort to travel back and enjoy a BBQ party with us, not to mention the town’s hospitality. People who attend these courses are gregarious and friendly and this was much in evidence at the party. Networking has long been a big part in being a successful mortgage or financial advisor and it was great to see so many people, who until a brief time ago were complete strangers, leave the event with new connections that will hold them in good stead throughout their careers.

Naturally, the party was completely paid for by Uberrimae Fidei (with a little help from a generous taxman!) but it certainly helps when over the past 12 months we have not had to make good our guarantee to pay for a resit exam fee for anybody who does not pass CeMAP 1 or CeFA 1 first time!

So, thanks again, from all of us here, to all of you, same time, same place, next year!

You may have read with alarm in this weeks press that some observers, notably economist Andrew Lilico of think tank Policy Exchange, has predicted that within 2 years base rate could be as high as 8%, some 16 times its current level. Given that historically, standard variable rate mortgages are 2% over the base rate, then this would mean an mortgage rate of 10% for many borrowers. If lenders maintain their current margin spread then spare a thought for those borrowers of Kent Reliance who would be facing a rate of 13.59%!

How likely is this prediction? The last time that the Bank of England base rate rose by more than 0.25% was more than fifteen and a half years ago in February 1995. Assuming that the Money Policy Committee keep to their tried and tested stance of changing interest rates by no more than a quarter of one percent at a time, this means that they would have to raise the rate every month for the next 30 months. The last time I checked the calenders there were only 24 months in a two year period!

Of course they have the right to increase rates as they see fit and are independent of the Government. As students of CeMAP know, their brief is to bring in inflation preferably at 2% but anything between 1% and 3% is acceptable. The way that they achieve this is raising or lowering interest rates. However, what effect on an already fragile economy would such rapid changes bring? Almost certainly, the much feared double dip recession. Will they risk this to bring inflation down?

Another important reason why I don’t believe this scenario is likely to happen concerns interest rates in the USA. Financial advisers when studying for their CeFA and DipFA qualifications, soon appreciate the fact that none of the world’s major economies can act totally in isolation. When one of these economies acts, the others react. This week Freddie Mac, the US Government backed mortgage lender launched their lowest ever 30 year fixed rate at just 4.36%. Ask yourself just one question. If the US Government believed that interest rates would be going up 16 times its current rate in the UK, would they really be prepared to “sell” monies at such a competitive premium?

Rest assured, interest rates will rise and one day will hit 10%, just in my humble opinion not quite as soon as some economists would have us believe.

The people that drive this industry of ours, both the regulatory bodies such as the FSA and our own professional bodies, the Chartered Insurance Institute (CII) and the Institute of Financial Services (IFS) have been for many years seeking to improve the standing of advisers in the eyes of their clients, the public. Together, the FSA, CII, IFS, numerous trade bodies and individual advisers themselves have been highlighting the need for financial advisers to be as highly regarded as accountants and even solicitors.

In the bad old days, or good old days, depending on your age!, of the late 1980′s, there was an explosion of direct sales companies who had as a business model the notion that if they took enough new entrants on, then, a few would survive and become very successful, earning their sales managers and companies high “override” bonuses. The majority that would inevitably fall by the wayside, would probably sold a few policies to their families and close friends before realising that the industry was not the right one for them. Either way, the sales managers had earned the fabled “override”. What allowed these sharp practices to thrive was that at that time, there was no requirement for any qualifications to be taken or passed. The papers were full of job advertisements for the new high flying companies. Very few applicants were ever turned down. All the companies did, in some cases, were to provide these raw recruits with one days training on just one insurance product and suddenly people were fully fledged financial advisers. The situation could not carry on, thousands of members of the public were being miss-sold policies and their was very little redress available. As you can imagine, the good name of the financial services industry was being dragged through the mud.

With the advent of the Financial Services Act 1986, insurance companies were required to ensure that their advisers had passed an exam. At first, the exams could be internal. There was no way that a level playing field could be assessed. One company’s could be of a high standard, another not so high! Legislation soon arrived and advisers had to take and pass a level 3 qualification. In those days only the CII ‘s Financial Planning Certificate, FPC (now called Certificate in Financial Planning, CFP), was available. Later, when the IFS entered financial services training, the Certificate in Financial Advice, CeFA, joined it as being acceptable.
leads to us nicely to my point about the industry becoming as highly regarded as accountants and solicitors.

All this reminiscing. Here at Uberrimae Fidei and no doubt other training providers, we get enquiries from prospective delegates from all walks of life. Fresh blood, with new ideas and differing backgrounds can only be good for the industry. However, recently we had a call from a gentleman enquiring as why training course were so long and did he really have to do it? He had had an offer from a broker to become a mortgage adviser. The broker had told him that he didn’t have to give up his employment, he could give mortgage advice every now and again and this is what he was trying to do. If I were a client, trying to arrange a £200,000 mortgage, I do feel that I would like to take advice from a professional rather than someone “who arranges a mortgage, every now and then!” A little while ago, there was an excellent series on the BBC, Life on Mars, where a police officer is transported back into the “good old days,” We have all worked very hard taking qualifications such as, CFP, CeFA, CeMAP and the new DipFA, don’t let financial services do an Ashes to Ashes.

Where there is a will there is a way and certainly if you had heard about Monday nights Panorama programme exposing a new financial scandal. This time about will writers, it would have you believe that all will writers will have your monies away!

The media, television included, will always look at the dark side, good news is never news and Monday night’s programme did not vary from this adage. Much of it focused on the conviction of two fraudsters who managed to use will writing to perpetrate their deeds. Or did they?

The act of writing a will seldom gives an opportunity for deception and fraud, the testator must surely read what has been written? More often then the “con” is committed when carrying out the wishes of the deceased through the use of vastly inflated fees and the like when acting as executors after the granting of probate. Some might consider that banks and some solicitors also operate the same scam, this time perfectly legally, when charging 3 or 4 % whilst acting as executors. No wonder they are so keen to assist their loyal customers with kind offer to help out when the time comes! With say, an average estate of £400,000 this could be as much as £16,000 plus VAT, not an inconsiderable sum for what in many instances could involve sending a few pre-formatted letters.

However we digress. What can be done to protect people from such unscrupulous acts as were depicted on Monday (what made it so despicable is that virtually the only person who could complain with confidence, the testator, was dead). The Legal Services Board will begin in the Autumn a review of what should constitute a regulated activity and what should not. For their part, both the Institute of Professional Will Writers and the Society of Will Writers have both called for legislation in the style of the FSA for financial advice, to be made compulsory for will writing.

One simple idea that many will writers believe could stop many further transgressions would be to separate the will writer from acting as the executors. This would end the potential conflict of interests that currently exist.

As mortgage advisers and financial advisers, we cover the barest of essentials with regards to testacy and intestacy in the CeMAP and CeFA studies and in the exams, thus we are well aware of the benefits of regulation. Holding CeMAP and or CeFA does give confidence to our clients on our knowledge and professionalism and we agree with the Institute of Professional Will Writers and the Society of Will Writers that recognised qualifications in this field would have the same outcome.

For the past 17 months we have seen the Bank of England hold the official base rate at an unprecedented 0.5%. Mortgage holders have never seen such low rates and surely can only go one way, couple this with inflation in excess of the Government’s target, now must be the time to fix your rate. But all is not as it seems.

Historically, standard variable rates have always been in the region of 2% over the Bank of England rate. Of the major lenders, only Nationwide & Cheltenham & Gloucester have set that rate and even then, this is the rate for existing customers only. Kent Reliance charge their clients 6.09%, with the rest of the lenders somewhere in between. After the ravages of the credit crunch, lenders have largely taken the opportunity to repair their balance sheets and steady their operating margins.

So, if standard variable rates are not as attractive as they should be. Surely, as a qualified mortgage adviser I ought to be advising on a fixed rate. But all is not as it seems. Taking a look at NatWest’s fixed offerings as an example. They are offering a 2 year, fix at 5.19% with an arrangement fee of £999 up to a maximum of 80% LTV, or, if you have a smaller deposit, a 5 year fix at 6.89%, same arrangement fee of £999 with a maximum of 90% LTV. A fairly typical lender, Coventry B/S, currently has a standard variable rate of 4.74%. According to the Land Registry, the average house price in the UK is £166,000. The figures underneath show total costs on the NatWest & Coventry offerings, assuming that interest rates don’t change throughout the period:

NatWest 2 year fix, mortgage of £132,800 (max LTV on average house price), total interest £13,784, plus £999 arrangement fee: TOTAL £14,783
Coventry, mortgage of £132,800, total interest £12,589 A difference of £2,194

NatWest 5 year fix, mortgage of £149,400 (max LTV on average house price), total interest
£51,468, plus £999 arrangement fee: TOTAL £52,467
Coventry, mortgage of £149,400, total interest £35,407 A difference of £17,060

Those examples do make the assumption that interest rates won’t be changing and that, is a big assumption, but who would have forecast 17 months ago that rates would not be changing during this period? Respected accountants Ernst & Young’s Item Club have recently forecast that rates may stay there for the next four years. The Governor of the Bank of England in July stated that “there may be a considerable way to go before interest rates return to normal”

Those readers who have studied for the IFS CeMAP qualifications are well aware that the only tool now used to control inflation are interest rates and we know that inflation is above target, so surely rates are going up? But all is not as it seems. Both the Government and the Bank of England are mindful of a “double dip” recession, raising interest rates to soon could possibly tip us back in to the recession abyss. Plus, money as a commodity (again, remembering our CeMAP & CeFA studies!) on the world markets is starting to free up, this should increase competition amongst lenders which in turn, I believe, will start to see standard variable rates actually drop to their historical norm.

One last point, is that the MPC (ah, back to my CeMAP schooldays!) meet once a month when deciding on interest rate changes. They have never voted anything above a 0.25% rise and indeed, the last time that the rate rose quicker than this was in February 1995. This means that there would have to be at least 8 rises before my typical Coventry standard variable is actually going to cost me more than the NatWest 5 year fix and if I’m lucky enough to be currently with Nationwide it is at least 18 monthly rises. In a fix? Not for me thank you!

So here we are barely a month after DipFA received approval as an appropriate level 4 qualification and already some people are saying don’t bother with CeFA.

For those people coming into the industry this advice surely has to be questioned on several fronts. Level 4, as the name implies is above the current requirement of Level 3, the CeFA qualification, for those delegates just starting that is a huge jump in knowledge and understanding. If we put it in educational terms, Level 4 is the
equivelant of completing the first year of a university degree. For someone with little previous financial services knowledge or experience that is quite a frightening prospect, travelling from limited, or no knowledge to university level.

In the IFS’ prospectus for the DipFA, they state that it “develops understanding of specific products, principles and issues”. The course covers amongst other areas: Principles of investment planning, financial protection planning, income protection, life assurance, pension planning, law and taxation. All areas covered by the current CeFA qualification. The key words are that it “develops understanding” this means that it takes a delegates previously gained knowledge and develops it. Prospective delegates contemplating taking this new qualification fall into two camps: existing practioneers who will build on their knowledge gained through CeFA, the FPC and the CiFP and new entrants to our industry. New entrants need the base knowledge in order to develop it.

Many people looking at taking CeMAP, CeFA and the new DipFA do so because they are looking to enter the industry sooner, rather than later. With hard work and application, CeMAP and CeFA can be gained within a short span of time, allowing people the opportunity the employment and income that they seek. The IFS themselves state that the time frame to achieve DipFA is 9 months! Employers are always keen to get people to CAS status quickly, how are they going to view 9 months of close supervision?

The FSA have told the industry that existing financial advisors must obtain Level 4 by the end of December 2012, new entrants will have a period of 30 months to achieve this (note, this still has to be confirmed by the FSA). Ample time to learn the industry and start to earn!

Don’t do CeFA? WHAT DO YOU THINK?