While the surge is ‘grim but predictable’, says Highclere Financial Services partner Alan Lakey or, ‘a warning shot across the bows’, says Paymentcare.co.uk’s Shane Craig, now more than ever is the time to seriously start educating the consumer.
Many firms are already distributing educational devices to run alongside an adviser’s sound expertise L&G with its ‘bringing protection to life’
training DVD and Bright Grey with its lifestyle calculator. Providers by combining the two advice and tools – advisers can and will make a significant difference in driving the protection point home. That plus Lifesearch managing director Tom Baigrie’s campaign, of course.
Lakey says there are three major tasks that the industry now has regarding the education of consumers. He says: ‘The first is to ensure that their levels of personal debt are minimised, the second is to make it clear that they cannot rely on the state for retirement funding and finally, educate the consumer about the importance of protecting your income against illness, death and redundancy. It’s not sexy and it doesn’t appeal to the modern consumer but it is nonetheless essential.’ However, this is not to say selling unemployment cover is the only answer.
Lifesearch policy adviser Matt Morris says UC doesn’t cover all protection needs so where appropriate advisers should be selling it alongside products like income protection. This, he says, highlights the need to outline the differences between UC and payment protection insurance.
Morris says: ‘We have to try and ensure that the rise in demand for unemployment cover doesn’t translate into more PPI being pushed on consumers in even greater numbers.’ Likewise, Lakey says: ‘IFAs have access to superior plans which easily outpace the staid PPI offerings of the banks and building societies. Consumers must absorb this message.’
In PPI’s defence, Burgesses director Sara-Ann Burgess says: ‘Whilst many consider PPI to be a rip-off, this is certainly not the case when the product is properly sold and premiums are not over-inflated. Although some High Street lenders have been found guilty of mis-selling and charging over the odds for cover in a bid to boost their profits, consumers should not tar all PPI providers with the same brush.’ If you’ll forgive me the Blairism perhaps it’s time for protection education, protection education, protection education, although that is something many advisers probably already know.