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Campaign Timeline: No Advice, No Protection

by Nicola York

October 2005 Money Marketing launches No Advice, No Protection campaign. IFAs and providers back campaign, including Bright Grey, Lifesearch, Scottish Provident, Skandia and Simplybiz.

November 2005 Moneynet and Lifesearch add pre-sales health warnings to their websites, warning on the hazards of buying protection products on an execution-only basis.

LibDem Treasury spokeswoman Susan Kramer tells a Treasury select committee meeting that consumers are confused by the fragmentation of advice. Government and Opposition MPs put pressure on the FSA to respond to the campaign and Labour MP for Edmonton Andy Love and LibDem MP for Richmond Park Susan Kramer both back the campaign.

December 2005 Which?, Aifa, Aegon and Zurich back the campaign.

January 2006 A month after Money Marketing asked four retailers to detail their life insurance sales processes – only Sainsbury’s Bank responds.

February 2006 Asda responds to MM’s questions, saying it would consider offering advice in its business model if demand grows but says the demand is not there yet.

March 2006 The Financial Ombudsman Service warns there is a clear line between advised and non-advised sales and no halfway house.

Cross-party MPs back the campaign. LibDem small business spokeswoman Lorely Burt tables an early day motion for the Treasury and FSA to address the possibility of large-scale misbuying of protection products. Supporters include LibDem Shadow Chancellor Vince Cable, Treasury select committee member Andy Love and all-party parliamentary group on debt and personal finance chairman Mark Lazarowicz.

June 2006 Treasury Economic Secretary Ed Balls voices his concerns to MPs over direct insurance sales, expressing the need for distinctions to be made between advised and non-advised sales of insurance policies. Balls also confirms the FSA is undertaking a review of general insurance products and is considering whether consumers buying protection on a non-advised basis get enough information to make an informed decision.

July 2006 57 cross-party MPs sign the EDM backing the campaign. Support comes from 25 Labour MPs, 11 Tories and eight LibDems.

September 2006 Research by Lifesearch finds that 60 per cent of consumers who buy protection products without advice still believe they can seek redress from the FOS if the policy proves unsuitable. Lifesearch managing director Tom Baigrie calls for internet sellers to ask non-advised buyers questions as part of the application process.

October 2006 Further research from Lifesearch reveals that 71 per cent of consumers who buy direct do not choose the protection product most suitable for their circumstances.

November 2006 The FOS says a nod or an affirmative answer during the non-advised sale of a protection product could be construed as advice. Lead ombudsman for insurance Peter Hinchliffe says there is a lot of confusion over what does and does not constitute advice.

LibDem Shadow Chancellor Vince Cable asks the Treasury to explain what measures there are to ensure insurance policies sold in a sealed pack “off the shelf” display their terms and conditions. The Treasury is rumoured to be considering a public consultation on non-advised sales next year.

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