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Commission down by 500m, says LifeQuote

LifeQuote has revealed a massive 500m drop in commission in the protection market which it believes is largely caused by mortgage regulation.

It says advisers are shying away from protection, anxious at the growing UK compensation culture and added pressures from the mortgage and general insurance regimes.

Lifequote says with sales continuing to look static for the rest of the year, the reduction in commission paid this year compared with 2003 looks set to hit 517,131,840.

The dampening of the housing market has undoubtedly been felt but LifeQuote says this is too convenient an explanation. Regulated mortgage sales take so long that advisers are reluctant to discuss protection at the same time because of inf-ormation overload.

There are also concerns that ambulance-chasers will turn to declined CII and income protection claims as the next big opportunity after endowments.

ABI statistics show that life policies sold are down from 564,000 in the first half of 2003 to 494,300 in the first half of 2005. Life and critical-illness sales stand at 246,700 from 528,000 in the same periods.

Sales and marketing director Richard Verdin says: “The answer lies in advisers being provided with the tools they need to instil the confidence that the advice they give is understandable to the client while ensuring issues such as IHT and the use of trusts are automatically covered during every recommendation.”

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