Lifesearch managing director Tom Baigrie says the FSA should crack down on execution-only protection sales as many people misbuy when they do not get advice.
Baigrie believes regulation of protection from January next year will lead many advisers to withdraw from the sector with the result that the majority of sales will be execution-only. He says the FSA should ensure that people do not buy products without getting advice.
In Lifesearch's latest protection report, Baigrie hits out at the FSA, saying that historically the FSA “devastates all markets it touches”, and claims regulation of the sector will stop people protecting their families.
He considers the rapid growth in the protection sector is largely related to the fact it was the last unregulated sector.
Baigrie says regulation would best serve execution-only, which is the area of the market where most clients end up misbuying.
Lifesearch's 35 advisers give predominantly phone-based advice to people looking to buy protection products.
Baigrie says: “We would like the FSA to address the real scandal in our market and stop the execution-only purchase of complex fin-ancial products.”
FSA spokeswoman Jackie Blyth says: “The FSA is not in the business of banning anything but is in the business of making sure there are rules and regulations in place to protect consumers. Those purchasing on an execution-only basis do take more responsibility than if they go through the advice route.”