Mortgage and insurance advice is very straightforward. The regulator describes the product life cycle as; product design and governance, identifying target markets, marketing and promoting, sales and advice processes, remuneration of sales forces and advisers, after-sales information and service and complaints handling. From an adviser perspective, you want to know what it is, whom it’s for and what you get. Right? Well, not quite. Two elements are missing from the product life cycle: the relationship between the product producer, the adviser and the customer, and the responsibility of the customer.
As an adviser, you will know the difference between providing information and giving advice. Information is providing facts, whereas advice is helping customers make sense of these facts to help them determine what product is right for them. Product providers should take more responsibility for advising advisers. This should include what the target market is for the product and why the product will benefit them and why the product could disadvantage those it is not designed for.
Providers also have a responsibility to the customer. This includes ensuring the adviser is kept in the loop with any dealings the customer has with the provider. This is important if the customer is thinking of cancelling or changing the product after the cooling-off period. After all, advice is given for a reason. Good advice has to be proven. But the advice, as well as the product is only as good as the customer using it. Part of the advice process should include the responsibilities of the customer during the lifetime of the product.
A challenge for advisers is determining whether or not a customer has the capacity to understand the product and what the consequences are of not handling that product appropriately.
We have to treat customers fairly, but part of the education process is helping customers treat the advice and the product fairly too.
Mortgage and insurance advice is very straightforward, but nobody said it was easy.
Adrian Lewis
Head of Marketing
Burns-Anderson PLC
