Speaking at the network’s annual conference, Alex Cotton, chief executive at Network Data, said the lack of customer take up of protection products was a direct result of lack of advice from brokers and the gap was now estimated at £2.5 trillion. She stated that within its network many advisers sold little protection and when they did it was for mortgage or life cover only.
Cotton said: “The reasons why many do not recommend protection include a lack of knowledge and the risks of non-disclosure. Yet, we have seen some positive changes from 2005 to 2006, with an increase of 40 per cent in sales demonstrating the training we have been offering is effective.
“The aim has to be to continue the growth in the amount of protection business we write because it is not only good for you, it is good for your clients and clearly goes a long way to convincing the regulator that we are trying out best to treat customers fairly’.”
Nick Baxter, managing director of Mortgage Promotions, agreed: “It’s quite amazing how many intermediaries arrange mortgages, but not other products. It has to be need-driven and where there is a need, you could argue that it is negligent not to satisfy it. There is a massive training need, but more and more companies are doing things to help. Brokers are happy to sell mortgages because they are within their comfort zone. Regulation changes that, as you have to give more encompassing advice.”
