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Advice is being squeezed out

Advice is key to the future of financial services but is in danger of being squeezed out of the market, according to Swiss Re&#39s Insurance Report of 2001.

Consumers want advice on personal pensions, income protection, PMI, criticalillness cover and life insurance but the report, which surveys more than 1,000 people, says access to advice is disappearing.

Although independent fin-ancial advisers are accused of having a commission bias, the report found that most consumers are still unwilling to pay fees.

Despite the public&#39s belief of IFA commission bias, the report found that depolarisation is taking place just when people are starting to understand the current market structure.

The report also produces damming evidence on consumer attitudes towards the industry and finds that the ABI&#39s Raising Standards initiative does not have credibility with the public.

Any form of self-regulation is not trusted by the public and the initiative was called a “guard dog with no teeth” by one respondent.

The report says only Government-set standards are likely to convince consumers that companies and products are safe. The market for financial services remains large, with huge numbers of consumers still without even basic insurance cover.

Thirty-two per cent of people surveyed have no life cover, 42 per cent have no pension provision and 66 per cent have no health cover.

Strategic development actuary Paul Hately, who is co-author of the report, says: “Most consumers are una-ware of what their needs are, unaware of the products that are available to meet those needs, confused by terminology and overwhel-med with the diversity and sheer amount of information available.”

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