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Tom Baigrie: It is time for a protection trade body

It seems frankly bathetic to write about anything else when the savers of Cyprus seem likely to have their money stolen by order of the ‘Troika’ charged with saving the Euro.

It might be that many of the foreign savers using Cypriot banks came by their money in ways they wouldn’t want fully investigated, but that would be to mix up prejudice and the law, which Europe has avoided since 1945.

It seems to me that an awful precedent is being set – that a government, when desperate for funds, can raid the savings of those who bank within its grasp.

Along with tales of extreme regulatory arrogance on this side of the channel it forms a deeply disturbing trend, where those in authority over us, supported by a deep belief in their own virtue, can play fast and loose with civilised norms in order to protect their projects or further their plans for perfection.

In this column’s little corner of the world it is becoming clear that protection needs to explain itself very convincingly if the present intermediated distribution landscape is to survive and grow, as consumers badly need it to.

Our threat may seem trivial compared to the chaos elsewhere, but it originates from the same minds and needs facing up to fast. To do so needs collective effort and this requirement has lately driven a flurry of talk of the need for trade bodies.

The Protection Code of Conduct campaign is not a trade body, but it has recruited 50 major intermediaries to its cause and has a leading light in each distribution channel to volunteer to serve on a steering committee, so it could perhaps become one. But within days of starting to think about that, other far more experienced committee men tell us they are considering starting offshoots focusing on protection, so the question we now face is whether to joins in the efforts of others or follow a more focussed agenda.

Protection has always suffered by being a sideshow to the main fare of investment and pensions at the CII, Aifa/Apfa and the ABI, or saving and mortgages at the BBA and BSA, but it is a market worth specific dedicated full time focus.

And looking at the post-RDR position, it is the retail side of our market that most needs most to now be properly represented.

For my money a new trade body is needed that is:

  1. By protection retailers and of them too. It can happily include those manufacturers who also distribute, and find funding from wherever it can, but its focus must be resolutely on the retail interface between those who sell or arrange protection products and the consumer.

  2. Determined to achieve what is right for the consumer. There is no need to duplicate regulation or the work of the CII but those that do not uphold minimum standards should be left or slung out.

  3. Inclusive of all retail streams, advised or non-advised, online or phone or face to face. Consumers want to deal in all these ways, so they must have the same underlying standards. It is no longer about what an adviser must or must not do.

  4. Set up very fast and have an immediate first intent to engage the regulators before their thinking gets past the point of no return, which perhaps takes much less time than it used to.

One adds another acronym to the alphabet soup at one’s peril, especially if one has no experience of forming a trade body before, so we will engage with others more experienced in these dark arts and report back in due course.

Watch this space.

Tom Baigrie is chief executive of Lifesearch


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. RegulatorSaurusRex 2nd April 2013 at 2:57 pm

    Too late Mr Baigrie, far too late I’m afraid.

    Hope you enjoyed your Easter egg.

  2. “Along with tales of extreme regulatory arrogance on this side of the channel it forms a deeply disturbing trend, where those in authority over us, supported by a deep belief in their own virtue, can play fast and loose with civilised norms in order to protect their projects or further their plans for perfection”
    The shape of things to come, no doubt. Aided and abetted by the nick cicuttie’s of this world.Reminds me of “The Enabling Act” 1933.

  3. I own a fast-growing protection aggregator / telephone sales operation. I am incredibly passionate about protection. I respect all manner of protection sales – be it advised / non-advised / telephone / face to face. I believe that so long as we all strictly follow the rules that are set in place for us by our regulator there is a place for all types of protection sales.

    Protection as an industry is stuck in the dark ages, and has been for the last 25 years. I attend conferences where the same things are said over and over again about how we need to change, and then nothing changes. Everyone seems to wait for someone else to do something.

    There is also a fundamental issue in this industry where passion is mistaken for ego – and everyone is paranoid about others being just in it for their own ends. Everyone will *always* be in it for their own end to some part. We all run or work within businesses that need to make a profit, so why on earth should we begrudge each other that right?

    It is about time that we stopped worrying about politics, power or ego. We must focus on change. There are some key battles waiting around the corner for our industry which have the potential perhaps even to halve the size of our industry. And there are great examples of trade bodies working in other industries facing similar challenges – the key is to ensure that the right people with the right set of values are driving those bodies.

    Without a concerted effort for a separate trade body which can negotiate with the FCA, Government and insurers on our behalf as distributors we run the very real risk of (yet again) allowing the world to change around us, rather than grabbing the opportunity to change things ourselves.

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