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It’s not plain sailing for protection

August is the only month of the year when both the FSA and Government cease the relentless flow of consultation and policy statements and external meetings wind down considerably.

So, while in holiday mode, I will take a more light-hearted approach to this month’s article and tell you about a recent thought-provoking experience.

I was invited by Honister Capital to take part in a day’s sailing at Cowes. Even though it required giving up a weekend, I leapt at the chance of racing a 40ft yacht with a crew that included several people from this venerable publication.

We were called to action at 7.30am on Sunday and, after a couple of hours training, approached the starting point for the 3 1/2-hour race.

We worked hard as a team, hoisting sales, winching ropes and responding to the instructions of our experienced skipper.

Clambering from one side of the boat to the other is not as easy as one might think – I had plenty of bruises as evidence. But all in all, it was exhilarating and great fun.

Towards the end of the race, the wind blew up. We were travelling at about 15 knots when a strong gust caught us as we jibed and the yacht broached, which, in nautical terms, means it turned on its side. The deck became a wall and everyone hung on for dear life.

Someone was in the water but fortunately was grasped by another crew member. The boat was quickly righted by our excellent skipper and all were safe, thank goodness.

The experience made me stop and think. Is sailing a hazardous sport? I certainly had not thought so up until now. What if there had been a serious accident? Which insurance would pay out, the yacht company’s, individual policies – both?

The experience highlighted the importance of having insurance in what might appear benign circumstances and I question whether advisers are doing enough in the protection arena.

A recent PFS member survey showed that 38 per cent of respondents expect to do more protection business in the next 12 months and themajority of the rest about the same amount.

Whether this is because of the impending loss of commission from investment business or increased recognition of the need by consumers and advisers alike, the public are generally well underinsured and more activity in this area cannot be a bad thing.

On a final note, you really must not miss the PFS annual conference in Warwick on September 20-21. We have a fantastic programme – so good in fact that this year we have a delegation of Dutch and Belgian financial planners joining us. We will give them a warm welcome and it will be great to share experiences with our EU colleagues.

Fay Goddard is chief executive of the Personal Finance Society

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