Lifesearch managing director Tom Baigrie says intermediaries should consider refusing to give business to protection providers who work with certain non-advised sales firms he believes are failing to treat customers fairly.
Writing in this week’s Money Marketing, Baigrie argues that if providers trade with non-advised sales firms, they should have to prove to IFAs they have made sure these firms have a robust sales pro-cess in place. If they do not agree to this, he says, IFAs should consider refusing to give them business.
According to Baigrie, IFAs suffer when customers are treated unfairly by some non-advised sales firms as the whole industry is blamed.
He says: “IFAs can easily require the provider partners who seek our protection business to demonstrate they do not support retailers who do not treat customers fairly and that they are certain their customers do not feel advised when they have officially had no advice. If they refuse, then our business should not go to them, except in the rare cases when it must to treat the customer fairly.”
But the Association of British Insurers says it is not up to providers to police rogue companies. Assistant director of health and protection Nick Kirwan says: “If distributors are arranging policies, then it is for the FSA to ensure they are doing so compliantly.
“These are independently regulated firms and it might be hard for providers to make judgements about whether independent firms are complying with FSA regulations.”
Kirwan adds that the FSA is much better equipped than providers to tackle hard-sell sales tactics as it can carry out mystery shopping exercises to make sure regulatory standards are being adhered to.