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What does the RDR have in store for protection?

The FSA will publish the next retail distribution review paper tomorrow. Below, commentators give their view on what may or may not be in the paper.

Last month, Money Marketing revealed that advisers recommending protection policies are likely to be allowed to continue earning commission following the RDR.

So with tomorrow’s paper looming, here is what industry experts are touting:

Bright Grey and Scottish Provident proposition director Roger Edwards says:“I am confident that the RDR paper will create a regime which will allow the protection market to grow rather than introduce one which would exacerbate the protection gap.

“This will include clarity around whether protection will be included in RDR in the first phase, and if not what the next steps are – including a positive steer on where commission and qualifications fit for all categories of advisers.”

Aviva UK Life protection director Richard Verdin says: “Based purely on experience, I expect labelling as per RDR to be adopted, commission to be maintained for insurance/pure protection for all advisers and, commission disclosure to be required, at least for investment advisers.

“What I would also like to see is consistency across protection advice whether a business transacts under Icobs or Cobs particularly on the issues of commission disclosure and professional standards – including the training and competence regime.”

Bupa Individual Protection head of product development Steve Casey says: “I hope that the FSA have taken on board the comments from the protection specialists as regards a full read across and the considered impact on sales.

“I suspect that a mediated approach will prevail along Icob/Cob lines. We need to be understanding of the timescales for RDR and protection implementation.”

Direct Life and Pensions Lifequote key accounts manager Phil Jeynes says: “The two areas I’m interested in within the RDR concern commission and qualifications. 

“I would be surprised if protection was not kept out of the switch from commission to fee based advice, as there is nothing wrong with the model as it exists today. I would hope also that advisers selling protection would not need to gain the same level of qualification as those selling the full range of financial products, as this would doubtless drive some out of the industry due to the cost, time and relevance of passing the new exams.”

Highclere Financial Services partner Alan Lakey says: “It is rumoured that protection will not be included within the RDR nonsenses. If so, this is the first piece of RDR-linked common-sense to emanate from Canary Wharf since this farrago of ill-thought out tosh commenced.

“Most consumers buy products when they are approached, too few will willingly purchase income protection or critical illness. Any regulatory interference which reduces the potential for the industry to increase the take up of these plans will be unwelcome.”

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Comments

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  1. The FSA is the agent of the treasury and the treasury is the agent of Gordon Brown. Brown has turned the UK into a nation of debtors, and welfare dependents. Personal responsibility counts for nothing. Everyone knows the cost of everything but the value of nothing. The FSA is a financial vandal capable of great acts of stupidity. Protection is sold and not purchased. If you remove distribution costs you will remove distribution. They may have learn’t their lesson from Stakeholder pensions but then again they may just be as stupid and as blind as they always have been.

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