View more on these topics

Critical points from the regulator

The sample was 25 firms – we assume this means insurers, banks, building societies and supermarkets.

Some advertising, according to the regulatory team, misused statistics, made the product appear unique and failed to give enough prominence to which conditions and which costs would not be covered in the event of a claim. Some advertising also implied the product was the equivalent of income protection.

The results will not surprise many advisers who have had concerns about how these products are promoted for many years whether by banks and building societies or more recently by supermarkets.

The regulator says that for those firms found to be non compliant it is not considering enforcement action yet but says if the practices persist it is an option. It has already attracted the ire of consumer group Which? which says the providers should have been fined.

Perhaps that is a little premature as this area is not long into statutory regulation but it should certainly be considered as an option if the poor practice persists.

The FSA is correct to highlight the areas but there are some problems with the announcement. The regulator will not name and shame firms unless it is taking enforcement action and this only appropriate. But it also makes it very difficult to get a picture of where the major problems lie.

The FSA also says these promotions suggest that critical illness cover is simple when it is not given possible exclusions.

Advisers might suggest that if the FSA were to take this logic a little further it might need to reassess how these policies are sold. The ideal of course is that such policies are advised on. If that is not possible then it may need to reassess how these policies are promoted. Specific warnings are required on investment funds and home loans. Maybe there is a case for something more clear cut on critical-illness advertising and other protection products too.


Advisers turning to structured products

Almost 90 per cent of advisers are increasingly looking at using structured products within their clients’ portfolios in the next year. Research from Trustnet Adviser and HSBC Investments polled 600 advisers and shows that 65 per cent believe that between 5 per cent and 20 per cent of a client’s portfolio should be held in […]

The dirty dozen

Norwest Consultants principal Harry Katz suggest 12 reasons to be cautious of the hype over putting property in a Sipp

Johnson Fleming is a finalist at UK Pensions Awards 2016

The UK Pensions Awards shine the light on excellence and recognise the advisers, providers and investment managers that offer the highest level of innovation, performance and service to occupational pension schemes and their members. This year’s awards looked at advisers and providers across 31 different categories and were rigorously judged by a panel of senior […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm