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Win back public confidence

Advisers must regain the trust of the public if fall- ing sales are to be reversed and the protection gap closed, says Protection Intermediaries’ Forum chairman Andy Couchman.

He says advisers at the latest forum in London also expressed concern at the growing length and complexity of protection application forms.

Couchman says the combination of a lack of consumer trust in advisers and the need for advisers to probe ever deeper into their clients’ medical history is a source of non-disclosure, with some clients hiding or not willing to disclose sensitive health information. The knock-on effect is that the greater the number of policies not paying out for non-disclosure the greater the harm to the reputation of the industry, including advisers.

Couchman says: “Advisers seem to have concluded that the public do not trust advisers and the FSA does not understand us. We need to educate the public so we can work together to resolve what is becoming a very serious issue.”

One respondent said: “With 30-page applications, it is not surprising that we have non-disclosure issues.”

Other concerns include regulation, product innovation and provider service standards. The forum agreed the rising cost of regulation forces many IFAs to focus on older consumers who can afford advice.

One adviser said: “The cost of regulation has forced intermediaries to move away from advising people in their 30s to advising people who can afford their advice, and that is mainly people in their 50s. It is no surprise that protection sales are down and the cost of regulation is partly to blame for that.”

Other reasons for declining sales include a lack of product innovation and poor customer service levels.

Couchman says: “We need more innovation in terms of products and in how we help our customers. PMI is highlighting how innovation can lead the way out of long-standing inherent product problems. CI, LTCI and IP designers please take note.

“Intermediaries want certainty in servicing and knowledgeable people who understand their problems. Where insurers provide that, there may be a potential to increase business levels.”

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