I have been wrestling with the overly complex Gabriel regulatory return system and find myself struggling with the meaning of questions and their purpose. Nonetheless, my reason for mentioning this is because, as an industry, we are always seeking to introduce simplicity and transparency. Let us not forget that originally these were proposed outcomes of the retail distribution review.
While negotiating the Gabriel labyrinth I had cause to complete the supplementary product sales data page and I noted that the PHI column is sub-headed private health insurance. Private health insurance brings to mind private medical insurance but this is not the case here because PMI has its own column. The protection industry struggles to introduce clarity and income protection is a classic example of an essential product which is not seen as a brand. The name change from permanent health insurance to income protection was logical as it is descriptively correct but the payment protection insurance floggers have tried to boost sales and legitimise their flawed offerings by usurping the IP title. This is bad enough but the FSA are causing even more confusion by inventing a new genre, which begs the question do they know anything about these products?
The FSA has recently transferred its money made clear web pages to the new consumer financial education body and I am pleased to note that the page relating to IP is both detailed and sensibly worded. It makes the valid point that critical-illness plans are not a sensible substitute and explains why.
The CI section is well set out but I am concerned by one suggestion which may mislead consumers. In highlighting heart attack cover, it states insurers will need to have medical evidence of the severity of the condition. It may be this is a badly worded reference to angina not being covered but it should be reworded or risk people receiving unsatisfactory outcomes.
The site is heavy on calculators but there is no calculator for IP or any form of protection. The wrong message I fear and an indication that protection does not feature highly in the regulator’s regard.
Nic Cicutti’s recent interview with Chris Cummings touched on Adviser Alliance and raised a number of questions about its aims and the rationale for its existence. Some clarification is required, particularly regarding Nic’s use of the “extremist” descriptive.
Adviser Alliance was formed from the remnants of the IFA Defence Union. This came about because there was, and still is, a perception that Aifa is hamstrung and reluctant to engage in forceful representation on matters such as the lack of a long stop and other fundamental human rights issues.
Campaigning against regulatory vandalism and human rights abuses cannot be considered extremist. It is more germane to say we are vigorous and relentless. When something is wrong it must be put right and while Aifa operates in a certain way we approach matters differently, an attitude described as confrontational and, while this is somewhat sensationalist, it is, to a certain extent, accurate.
As Nic and Aifa would surely accept, there is no single means of achieving a desired end result. Adviser Alliance, with its greater focus on the long stop and other human rights issues, is happy to work in tandem with Aifa, IFADU, IFA Political Action Committee or any other body that aims to restore sanity to the financial services world.
Alan Lakey is partner at Highclere Financial Services and director of Adviser Alliance