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FSA protection probe ‘bizarre’

Protection experts have attacked FSA plans to scrutinise investment advisers selling protection after the RDR ban on commission.

Speaking at the protection review conference at the Marriott Grosvenor Square last week, Friends Provident chief executive Trevor Matthews said the FSA was wrong to be concerned about too much protection being sold.

He said: “There cannot be any serious consumer detriment by selling more life insurance, income protection and protection products. Everyone in this room should be arguing strongly not to extend adviser charging to protection products.”

Highclere Financial Service partner Alan Lakey called the FSA’s planned probe into protection sales “bizarre”.

Pru Protect director of protection Kevin Carr said: “If other advisory parts of the market are given encouragement to sell protection then that is something we would all welcome. I feel the intentions are misplaced.”

But Association of British Insurers assistant director of health and protection Nick Kirwan warned of another unintended consequence of the RDR.

“It may also go the other way where people say that because they have two different regimes of remuneration, they are not going to advise on protection at all. That would be really bad.”

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