In a world of wishful thinking, the protection market is efficient, far-reaching, and covers the vast majority of the population, says Carrie Johnson, protection director at Royal London.
Unfortunately, groups of people are still missing out on products that could help them cope financially with any shocks life throws at them.
But the Financial Conduct Authority's consumer duty has already made protection a more integral part of the advice process, and has increased the quality of advice, products, ongoing service, and value, she says.
In a Q&A with FT Adviser In Focus, Johnson describes what the protection market is still lacking, where the consumer duty has made a difference, and what she would do for protection if she were in power.
FTA: Has the consumer duty been a game changer in terms of protection sales?
CJ: Consumer duty is emerging as a game changer, it’s still early days so I don’t think we have seen the full impact as yet.
What we have seen is a meaningful change in how advisers view protection as it has increasingly become a more integral part of the advice process.
Networks are appointing specialist protection writers and several firms are reviewing their panels of providers. I think we will see more growth as practices embed and become more widespread.
The key changes we’ve seen so far are, firstly, increased interest in protection advice from advisers who previously didn’t focus on it, either by including protection in their own advice process or by referring it to protection specialists.
The latter can be colleagues within the firm, or referral partnerships.
But it’s clear that consumer duty has seen a change in wealth and holistic advisers considering protection to ensure their clients have the right cover in place.
And secondly, broader conversations considering a range of potential life events, leading to increasing cover within products, and more policies written in trust or using beneficiary nomination.
FTA: What were your expectations for the protection market when it became clear what consumer duty was all about?
CJ: We were expecting changes so it’s good to see them emerge so positively. We are seeing an increase in quality, of advice, products, ongoing service, and value.
I expect this to continue to grow. A good example is the increasing focus on the speed of claims and experience across the industry.
Although the intention has always been good, there is now more impetus to get this right for our customers.
FTA: What does this mean for the adviser's role?
CJ: This will change the adviser’s role as they will need to consider a much broader range of factors, with less focus on price and more on quality and value.
