Protection providers should invest in advisers who specialise in protection and stop pouring money into “uninterested part-timers”, says Lifesearch managing director Tom Baigrie.
Speaking at the Association of British Insurers’ Protection Conference in London last week, Baigrie claimed that providers need to rethink their distribution channels if they want to boost sales and close the £2.3trn protection gap.
He said that the sale of protection needs to be separated from other financial products because many advisers are trying to concentrate on asset management and not bothering with protection or are trying to advise across the range of Isas, Sipps and protection.
He said: “You need proper distribution channels. Do not rely on uninterested part-timers or mortgage brokers, invest in specialist protection advisers. Two-thirds of your market is controlled by IFAs but any IFA with half a brain is getting into asset management. There is a huge opportunity to turn that two-thirds into 15 per cent and you have grown.”
He hit out at product providers, such as Norwich Union, with their own direct-sales channel claiming they undermine specialist protection advisers. Baigrie said: “You own those companies and their sales processes are appalling. There is no relevance to the customer’s needs. You are cannibalising your own market.”
But Baigrie said that the trend of providers buying companies with distribution could be an effective way to increase protection sales if providers choose specialist protection advisers who look at the whole of the market.
He said that product providers ought to be moving into joint ventures with companies with distribution channels and should not be scared to tie up with whole of market advisers because they could profit from retail and wholesale by dist-ributing and manufacturing products.