Apparently, direct sales of life and critical illness business account for about 20 per cent of total sales. From a standing start of just a few years ago, that is an impressive statistic. However, something is seriously worrying me about those direct customers who make up that 20 per cent.I’m concerned that the protection needs of these people are unlikely to have been properly addressed through a non-advice distribution channel. For example, how many of these customers will have their protection plan written in trust? How many will have a joint policy when two single policies would have been more appropriate? How many young single people, with no dependants, will have bought a life policy without the actual need for one? I would venture a guess at most of them. These are just a few fundamental questions that are not being addressed through non-advice, which would be addressed through the advice channel. Now, I’m not suggesting that healthy competition is bad and I believe that people should shop around for the best deal. However, do the current non-advice distributors actually provide the best protection solution and therefore the best overall deal? I know that’s a bit of a trick question, as without advice, you can’t really tell. So the answer has to be, no, probably not in most cases. Some defenders of non-advice would say, “at least some protection is better than none at all”. On the face of it this seems like a fair point, however, I disagree. Let’s say you need a car to get to and from work but you can’t afford a new one. So you buy a cheap car from a private dealer on a sold-as-seen basis. At least you have a method of getting to and from work? The problem is, this particular car you’ve bought is a ‘cut and shut’ car welded together from two previous write-offs. You only realise this when you have a crash and the car falls apart, providing you with little protection at all. Like buying a life or critical illness plan direct, without expert guidance, you may only find out it is inadequate when you come to rely on it the most, and then it is too late. There seems to be a regulatory mismatch between advice and non-advice. Just one example would be treating customers fairly. It’s not fair to keep them from important information relating to alternative forms of protection such as family income benefit and income protection. It is not fair to hide the fact, in post-sale small print, that ‘going direct’ means a customer signs away their right to financial redress in the event of something going wrong later on. Many people are buying inappropriate policies and, in the event that they never have to claim, will not even realise this. Advisers would be hung out to dry by the FSA if they sold protection in this way. So what’s the difference? Why is there one rule for them and another for us? There is a justifiable regulatory requirement on us as advisers, and the product providers, to treat customers fairly. I would like to see the same courtesy shown by our own regulator to us. This mismatch must be addressed. If it is not, I give most non high-net-worth protection advisers five or 10 more years in business – maximum. Advisers cannot compete on such an uneven and unfair playing field. Are we, as an industry, happy to stand back and witness the current dumbing-down of personal finance, to a point where customers have nowhere to turn for help when it all goes wrong? I hope not.