Speaking at the Mortgage Business Expo in Manchester, Michael Ward, managing director at Direct Life, said the firm had twice conducted mystery shopping exercises and found advisers were 'woefully inadequate at matching the right protection product to the right protection need'.
Ward said many advisers would find it difficult to stand their recommendations up in the face of a complaint to the Financial Ombudsman Service and beseeched intermediaries to take a more holistic approach to protection.
Ward accepted some of the protection policy applications posed awkward questions, which made it difficult for advisers. However, he said it was up to intermediaries to make the sales process as easy and painless as possible by speaking in plain terms and explaining the risks that clients faced openly.
He also urged advisers to move away from a reliance on the cheapest and easiest sale and added: “It is all there to play for and protection is an excellent tool. Intermediaries must be more inventive.”
However, the problems hitting the payment protection market (PPI) may boost sales of income protection policies.
But Nick Kirwan, chairman of the Association of British Insurers Protection Committee, warned the income protection sector must get itself into shape if it is to take advantage of opportunities that arise out of the Competition Commission’s investigation into the (PPI) market.
Kirwan said: “Income protection is the most appropriate product for many, but it is not taken up.”
Kirwan said the sector was not punching its weight and unless it ramped up efforts to get its house in order, would miss out on future opportunities.
He added: “There may be opportunities following the PPI market review and we have to make sure that income protection is in the best possible shape to take advantage of that and fill any gaps that appear.”
Kirwan said the ABI was currently considering the introduction of a baseline product and a standard list of features and occupations that would help simplify income protection.
He added: “Protection is an issue for today and we should be talking to clients about it. Better understanding will make for an easier sale.”
