Positive about protection
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Against a back-drop of troubling economic predictions and the seemingly endless list of pundits lining up to knock the advice sector it was refreshing to spend the last two weeks helping to judge this year’s Money Marketing adviser awards.
Being part of the 80 interviews in 12 different categories, alongside a host of industry specialists who gave their time to help judge each category, offered a chance to hear from a range of adviser firms of every model and every sector who were excelling in tough times.
The quality of entries was fantastic but, without giving too much away before the awards ceremony on March 25 at the Grosvenor Hotel, the standard of submissions in the category of best protection adviser was particularly impressive.
The FSA wisely decided against reading across the retail distribution review to protection last year, after nearly scaring the industry to death by floating the possibility. Hearing the short-listed candidates explain the service they offer their clients, the huge benefits the right policies bring to individuals and families and the amount of time and effort people give for free to promote and improve the sector would have left anyone from the regulator in no doubt the right decision was made.
For whatever reason, protection is often seen as the poor cousin compared to some of the more glamorous areas of financial services, rather than in its deserved position as the foundation of financial planning. The quality of this year’s submissions show the protection advice sector can hold its head high.
Consumer inertia is often cited as the biggest barrier to closing the protection gap. The failure of the Consumer Protection Insurance Engagement Campaign last year to gather adequate funds to take forward a high profile media campaign was depressing news.
The benefit of hindsight, of course, makes commenting on these matters too easy, but it was always going to be a tough ask to get a range of reinsurers and insurers with varying distribution strategies to agree to fund the £5m plus costs of the campaign, particularly given current economic conditions.
Can anyone grab the baton from CPIEC and make use the of the fantastic efforts of all those involved in the campaign?
The ABI would face similar problems to CPIEC in terms of raising the funds and a divergence in distribution strategies.
The other obvious candidate is the Government. The Conservative Party unveiled their economic manifesto this week, mainly a rehashed list of policies they had already announced.
The 24-page document, published on Tuesday, was designed to grab headlines rather than act as an exhaustive list of Conservative economic polices should they gain power. There is certainly a lot more thinking left to be done.
Perhaps then, for a Party so keen to promote David Cameron’s so-called nudge agenda of empowering individuals to make what would be considered the “right” decision, the Tories should look at funding a campaign to promote the benefits of protecting yourself and your family, and the dangers of not doing so.
The Tory manifesto proposals included launching a national free advice service, presumably building on the Government’s current plans for Money Guidance. The £50m a year service would be paid for by the industry through a terribly named “social responsibility levy”.
It seems unfair that the industry should be solely burdened with the cost of such a scheme which presumably is intended to benefit society as a whole. The Government’s proposals for the cost of Money Guidance to be shared between industry and tax-payer seem far fairer.
But leaving aside arguments over funding, if the Tories are willing to commit that much industry money to a campaign aimed at improving financial education and empowering the consumer, surely some of these funds could and should be directed into the kind of media campaign CPIEC was looking to launch.
Let’s hope the Tory Treasury team takes a long look at CPIEC’s hard work and is persuaded of the social benefits of such a campaign.
This should be examined in tandem with a review of other potential methods of encouraging people to protect themselves- such as auto-enrolment or tax reliefs.Looking at predictions for a ballooning wefare bill in future years it is unlikely the state will be able to offer adequate support.
Le Beau Visage managing director Peter Le Beau believes the next administration should appoint a minister for protection to drive forward reform.
It would certainly send a message that they were serious about financial education, welfare reform and building on the good work already being done by advisers.
