Highclere Financial Services partner Alan Lakey says the findings in the FSA’s review are no surprise and prove that CI should not be sold on an execution-only basis.
He says: “It is far too easy for bucket shops to sell policies to unwitting consumers under the pretext of no advice and without the protection of the Financial Ombudsman Service. CI cover is complex and consumers are bound to want answers to questions and as soon as a relevant question is answered, it stops being execution-only.” Master Adviser IFA Roy McLoughlin says that once again the findings in the FSA report shows why advice is needed with every sale.
He says: “You cannot buy these products from the web or direct – it does not work. This is still a product that needs advice because people buying it do not understand the type of cover they are purchasing.”
The FSA report says advisers are “central” to the buying decision of CI but there is “a grey area” in terms of consumer perception of what constitutes an advised and non-advised sale.
Lifesearch senior policy adviser Matt Morris says: “Icob was supposed to mean that execution-only sellers had to make it clear that they do not give advice and anyone who buys from them is not protected by the ombudsman. Most execution-only sellers have ignored this and consumers are as confused as ever about whether or not they are getting advice.”