View more on these topics

Forum is forewarned

Ian McKenna
Ian McKenna

There can be few things advisers hate more than clawbacks. It can be hard enough to get business on the books without having to put in more work to reinstate it.

In the economic downturn, this has inevitably become an increasing challenge. Consequently, there has never been a more important time to address this problem.

Earlier this year, when F&TRC researched the overall areas of business process that firms most wanted to address, improving persistency was identified as the number- one issue.

Putting in place better procedures to address lapses will not only improve persis-tency for advisers and provi-ders but, most importantly, will ensure that customers continue to benefit from the cover they have purchased.

In addition, with insurers increasingly revising policy wordings so that fewer and fewer new contracts offer the range of protection for clients as older critical-illness and income protection policies, making best use of established policy wordings has probably never been more important.

Many further benefits of improving these processes were excellently articulated by Emma Prescott of Lifesearch in Money Marketing on June 29.

Our dialogue with advisers has made it clear that, where an IFA is notified promptly that a direct debit mandate has failed, there is a far better chance of keeping the contract in force if the customer can be contacted in days rather than weeks. During our discussions, a number of life offices have been praised by advisers for their facilities in this area, especially Fortis, with Friends Provident and Legal & General also being highly commended.

During this work, it has become apparent that many firms find the management information service on lapse prevention provided by Legal & General particularly useful. This service, which is available to all IFA firms, can identify the amount of at risk business that has been protected.

This brings real value to the advisers in helping them understand the financial benefits of such activity. It has also become clear that large numbers of contracts go off risk unnecessarily when clients change bank accounts.

To find an industry solution to this issue, many leading advisers, life offices and reinsurers have been partici-pating in a series of meetings and conference calls under the auspices of Protection Forum in recent months.

This group builds on the established Adviser Forum structure which has been operating for nearly a decade, bringing together the biggest adviser firms, insurers, plat-forms and adviser software suppliers to identify how best to improve operational services to advisers. The participating advisers represent over 70 per cent of registered individuals in the market. More information on the group’s work can be found at

Advisers will be aware that while a handful of providers are communicating such information electronically, in practice, the majority still communicate such situations on paper, hardly the best way of communicating in the 21st Century.

It has already been agreed that it is important to find a mechanism by which adviser firms can be notified electronically within 24 hours whenever a direct debit mandate fails, a client misses a premium or a policy is cancelled.

Detailed consultation is now taking place on the optimal ways to achieve this, with the objective of agreeing good practice principles by the end of September.

This will identify a frame-work which insurers and software suppliers can embrace in order to deliver this important information to advisers promptly.

While Adviser Forum is built around a core dialogue with the biggest IFA firms, social media now makes it far easier for us to include a wider range of advisers in the consultation process who do not have the resources to be able to attend the main meeting.

Consequently, a Linkedin group has been created for Protection Forum, where a range of the key questions being discussed as part of the adviser consultation process in designing these new services can be found.

All too often, I hear advisers complain that insurers are not listening to them when new services have been designed.

It is very clear from the extent of support this new initiative has been receiving from insurers that this now represents a major opportunity to communicate what advisers want, hence extending the consultation process via the Linkedin discussion group to enable even the smallest adviser firms to easily contribute to the process.

There is increasing evidence that protection sales will have a crucial role in enabling many adviser firms to migrate to adviser charging providing a potential lifeline of continued comm-ission income while firms help clients embrace the new commercial arrange-ments for providing investment advice.

In my view, this makes it even more important to have the most robust processes in place to ensure that protection business, once written, stays in force.

The adviser consultation part of the process is due to finish at the end of August when the draft good practice proposal will be circulated to the major adviser firms for their approval before being presented to the wider Protection Forum for approval at the end of September so I would urge any adviser firms wanting to contribute to the process to visit the Linkedin group referred to above as soon as possible.


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