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Is it only me that is questioning the worth and the motives of the Association of British Insurers? In 2007, its lobbying succeeded so famously that the initial retail distribution review publication appeared to be a replica of its official submission.

Some years earlier, it failed to locate any potential consumer detriment in the design of income protection plans, an opinion that failed to survive any scrutiny. Then last month, it failed to show up for the launch of the Income Protection Task Force’s white paper. This was a call to arms for the protection industry, yet apparently the date conflicted with another even more impor- tant meeting and they could not locate a single representative to travel the mile or so to the Tower Bridge location.

The FSA also failed to arrive although, to be fair, its journey was a good two miles further.

I know that other advisers are incensed by the revelation that the FSA squandered around £250,000 on Christmas knees-ups for its staff. Given this season’s Canary Wharf sermon about unrealistic bonuses, it is unacceptable that such industry-funded sums should be used in such a dissolute manner. It comes at the very time we are told it needs a 30 per cent rise to its annual £303m income and also that we should fear it. I certainly quake at its profligacy.

Recently, during a compliance visit, an FSA official notified the IFA that he was expected to always select the cheapest protection plan. Hopefully, this was a one-off. If not, the FSA needs to rid itself of this simplistic notion as it shows a complete misunderstanding of value distinctions. To apply this logic to critical illness and income protection plans is lunacy.

The FSA recently published the snappily titled Post Implementation Review of Icobs. Within this 116-page opus, we learned that the majority of execution-only purchasers believed they had got advice and that consumers fail to under- stand the differences between critical-illness and income protection policies or the scope and limitations of these plans.

This research highlighted how consumers often misunderstand the nature and scope of the protection product purchased. It also illustrates how they can be baffled to the point where they are unsure whether they did or did not get financial advice.

I wonder what the results will be if an identical study is undertaken after RDR implementation. Common sense suggests that the confusion will be magnified.

Recent research by Axa verified that the UK is woefully underinsured. This information is not new but confirmed that consumers do not voluntarily make decisions to buy necessary cover but instead need to be guided.

Sadly, this brings me back to those three letters that readers have come to dread. Do we want a post-implementation world in which banks, bucket shops, tied agents and direct salesforces are assisted in promoting their often tawdry products to the consumer or is it both ethical and beneficial for the consumer to get whole of market advice from competent practitioners?

The answer to this question will shape our world for the next decade. Let’s pray that they get it right.

Alan Lakey is a partner at Highclere Financial Services

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