Advisers say FSA needs to probe bank protection sales
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Sales standards of pure protection products sold by mortgage intermediaries are being reviewed by the FSA to ensure patterns of commission-driven sales do not arise.
But advisers have criticised the regulator for targeting smaller practices when it should concentrate on the banks.
In the FSA’s retail distribution review consultation paper on pure protection sales by retail investment firms, the regulator says it is concerned that the movement of intermediaries into product areas where they have little or no experience could give rise to conduct risks. As a result, it will be reviewing the sales standards of pure protection products by mortgage intermediaries.
Mortgage Practitioner principal Danny Lovey says: “The sales standards in the intermediary market are pretty high. I feel that a lot of the misselling for protection comes from the bancassurers, look at PPI. But it is much easier for the FSA to go after those that are at a lower level who do not have the financial clout and not force their will on the big boys.”
Highclere Financial Services partner Alan Lakey says: “Advisers are understandably upset by what appears to be favourable treatment for the very sector that has the worst complaints’ record.”
Master Adviser IFA Roy McLoughlin says a review would be a positive step but adds: “We hope they also apply this to the bank advisers where, arguably, a bigger potential problem lies.”
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