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Watchdog says a nod is giving advice

The Financial Ombudsman Service has warned that something as simple as a nod could be construed as advice during the non-advised sale of a protection product.

Lead ombudsman for insurance Peter Hinchliffe says customers often ask questions which relate to the suitability of a policy when buying through a direct sales channel and a nod or a “yes” answer from the seller could constitute advice.

He says there is a lot of confusion over what does and does not constitute advice in the insurance market but says if there is evidence that direct sellers are offering advice on the suitability of products, they should stand behind the advice they have given.

He also says firms that only offer a direct-sales channel should consider whether to train their sales staff to be able to offer advice if the consumer wants it. Hinchliffe says: “Just because the seller says the sale is non-advised does not mean it is non-advised. A nod at a certain point in the conversation could be considered as advice.”

Baigrie Davies joint managing director Tom Baigrie says: “In the light of treat- ing customers fairly, non-advised sellers should be considering whether to provide an advised option and should be careful to make sure the customer is clear on whether or not they have received advice.”


‘Regulation being privatised by FSA’

The FSA is effectively proposing to privatise regulation, according to a leading financial services lawyer. CMS Cameron McKenna partner Simon Morris says last week’s FSA discussion paper on how trade body guidance can supplement FSA high-level rules could create a confused landscape with a number of pseudo-regulators emerging. Morris says the proposals could herald the […]

British Insurance sets up IP broker service

British Insurance is setting up a specialist income protec- tion brokerage service and has invested £500,000 to snap up the internet domain name The company plans to launch in January 2007 and will look to beat rivals on price by refunding half of the commission on every policy sold. In August, British Insurance launched […]

Providers must leave it to advisers

I find it incredibles that the FSA has called for product providers to take more responsibility for the quality of advice that is given by advisers. The FSA will be aware that the advice process primarily begins with (among other things) a fact-find, possibly supplementary questionnaires, full discussion with the client, recommendations, further discussions, decisions […]

PMI insurers create confusion over cancer benefits

Private medical insurers are creating uncertainty for members of PMI schemes because they have differing approaches to cancer therapies.Watson Wyatt is warning employers and especially those that operate self-funded arrangements to ensure they are aware of the PMI providers’ stance on cancer treatment as it could impact financially on scheme members.The use of Herceptin and […]


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