A ‘protection sellers code’ is a great idea. It should, in theory at least, ensure that however a protection product is sold, an agreed set of basic fundamentals are adhered to by the seller. This would improve outcomes for those trying to protect their families and their finances.
It would give those of us who care about our clients – and the products we advise them to take – a better chance of convincing the consumer to take the cover they really need, instead of just taking a small amount of cheap life cover.
Time and again our advisers recount what ‘so and so’ firm had said to their potential clients, at best exaggerating standard benefits and at worst totally misleading them into thinking a cheaper and inferior alternative is in fact exactly the same. This is often a result of non-advised channels slipping into pseudo financial advice where it helps them to convince a client to buy a product. Sadly it is also true of many bank advisers and some advised firms that have strayed beyond their area of expertise.
But does the industry care enough? Do protection providers – and likewise the vast majority of protection product distributors – care enough to support this initiative, implement it, monitor it and act accordingly when it is broken? We are not sure. So we challenge the market to draft an agreed document and pledge their support.
The worrying truth, however, could be that some protection providers and distributors don’t care enough about the client. As a result any such code won’t ever get off the ground with those very firms that should have it applied the most. As long as their commission is paid and they continue ‘not’ to be responsible for their customers’ choice of product, they are happy.
But every miss-sold plan, every declined claim and every policy cancellation damages all of us in this industry. Until providers help ensure that their products are distributed by firms who can clearly demonstrate that they operate in a way that treats customers fairly, those of us who advise our clients are at a disadvantage. A distributor’s code that providers monitor would begin to enhance the reputation of the protection market and those who care about their clients.
Roxburgh Financial Management principal Damian O’Connor