View more on these topics

‘Direct is the only way to close the gap’

The only way the industry can hope to tackle the protection gap is through direct channels, according to Defaqto.

It says a third of level term insurance products are marketed through IFAs but almost half are marketed through the direct channel.

Insight analyst for life and protection Ben Heffer, who wrote the report, says: “This trend will continue as the IFA sector shrinks and becomes less concerned with protection than it is now and the need for providers to increase distribution becomes an imperative.

“It is only though a buoyant direct channel that the industry has any hope of addressing the protection gap.”

Heffer believes that insurers will develop more direct-toconsumer propositions, particularly online, as they look for cost-effective mass distribution in the wake of a shrinking IFA market. He says banks will also play a key role in distributing protection products.

He says: “Now we don’t have the direct salesforces we used to, the organisations that have the most contact with the most people are the banks. I would imagine they are really the only way of reaching more people in terms of closing the protection gap.”

But Heffer argues that although many insurers will be focusing on direct sales, a reduction in provider and adviser numbers means there is still a risk that fewer consumers will have cover.

He says: “There is limited time to put in place effective models to increase the distribution of protection products.”

Recommended

12

FOS rules against Norwich & Peterborough over Keydata

The Financial Ombudsman Service has ruled that Norwich & Peterborough Building Society must payout a claim for £28,000 relating to its sale of a Keydata Lifemark product. A report in the Eastern Daily Press says the FOS has ruled that Norwich & Peterborough failed in its advice to an elderly couple which “exposed their capital […]

FSA fines brokers £200k for fraud

The FSA has fined two insurance brokers a total of £200,000 for insurance fraud and banned five individuals for failings relating to insurance fraud.

Deficit denial would wreck economy, says Osborne

Chancellor George Osborne has hit out at critics’ claims that the Government’s plans to reduce the deficit will risk Britain’s economic recovery. In a speech delivered today in London, Osborne (pictured) said there is a credible plan in place to tackle the budget deficit, currently at 11 per cent of GDP. The Chancellor said it […]

Bonds in 2017: Stick or twist?

Royal London Asset Management Bond Fund Managers Paola Binns and Craig Inches look at why short duration could be a key tactic for fixed income investors during 2017. Read the full article here The value of investments and the income from them is not guaranteed and may go down as well as up and investors […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. This would be a stupid mistake, we have already seen banks offering “best advice” by offering their poor policies 30% more expensive than other providers.

  2. Seems one conversation with Ben Heffer has created four or five articles great work.

  3. Eric Djemba Djemba 20th August 2010 at 11:23 am

    Seems one conversation with Ben Heffer has sparked a whole host of articles. Good Work

Leave a comment

Close

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

Email: customerservices@moneymarketing.com