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Tom Baigrie on Protection

It is time that those who help form consumer opinion understood that advice adds value when buying protection – and they should say so.

Protection was, until the last bear market, the IFAs&#39 Cinderella – quite useful and a good little worker but not glamorous and largely kept out of sight as being deemed boring. Well, that bear took Cinderella to the ball and far more of us are now treating protection as a core part of our business.

But while we pauper princes were wising up to Cinders&#39 importance and value, so were the Ugly Supermarket Sisters.

And they, the most booming marketing voices in the land, are now saying loud and clear that buying protection is a matter of deciding what you want after a quick look at the web and then getting the cheapest version of it.

As an aside, they are also saying that websites that help you choose and then execute a deal are not advising you, which is an intriguing bit of logic. But their core point is one that all opinion-formers seem broadly to agree with. It is that protection is a simple commodity purchase that the person in the street can easily make and that its price is the best definer of value.

Three of the many reasons as to why this seems plain wrong to me are as follows:

•How can one make proper life cover choices if you aren&#39t well versed in the several different types of policy available? At Lifesearch we are forever telling young singles without dependants that they do not need mortgage life cover at all, though they should consider IP or CI cover.

•How can one define how much lump sum cover you need and for how long, if you have no experience of assessing realistic net yields from invested capital. We correct misapprehensions on this score at a rate of a dozen a day.

•How can one decide whether CI or IP or Asu is the best for you, unless you are familiar with them? As Which? proved recently, there are plenty of FPC-qualified high-street advisers, let alone consumers, that do not understand this.

Now, of course, such research is not that hard and an hour or so of thorough study will get you close enough to make a decent decision but who takes responsibility for informing you accurately?

If a supermarket, say, purports to offer a viable aid to decision making and purchase via their website, they best have the answers on that site to my three points above and all the others that follow when you think of it a bit. Otherwise they are misleading customers and should prepare for a bit of regulatory brand damage.

I am not saying that consumers should not be able to buy cover from sources that do not offer advice but I am saying that no one should be trying to persuade consumers that that is the clever thing to do.

Some say that is OK because some protection is better than none but they clearly do not understand Gordon Brown&#39s tax credit system. More fundamentally, is it not true that thinking that you have covered your needs adequately when you have not is a more dangerous long-term state than not being covered but knowing you must do something about it?

In truth, protecting families is a bit complex. Important things often are. So the consumer is best off getting advice and advisers need to get to grips with the regulated subject or face the regulator. If you agree, then you best start challenging the &#39supermarket is best&#39 zeitgeist loud and clear, because IFAs don&#39t have fairy godmothers, they have to get to the palace the hard way. Write to your pumpkin. I mean MP.

Tom Baigrie is managing director of Lifesearch

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