According to research reported in last month's COVER, many IFAs have poor protection market knowledge. Do you agree and what should be done about it? Do we need a dedicated protection exam?
Roy McLoughlin, Master Adviser
There is no simple answer. Most advisers were probably trained at some point where protection would have formed an integral part of their training.
However, as this part of holistic planning has become almost unfashionable, inevitably knowledge of these areas may have waned. Add to this that mortgage brokers experienced some bumper years, which prompted many to leave protection.
Most advisers understand basic life cover, but the training was not around as much with the development of critical illness (CI) and income protection (IP).
What many find frustrating is being ‘encouraged' to raise standards to level 4 without a dedicated protection exam ironic, as the regulators say protection is at the heart of this holistic advice.
There are very sophisticated and difficult exams on other subjects, which is quite right. There is a group protection one, but the points achieved do not count towards the qualification that most of us need.
The standard excuse seems to be that there isn't much call for a protection exam, but that is plainly incorrect and unfair.
It should also be in the interest of insurers and reinsurers to bang this drum - both for their internal staff and helping to raise the profile of such an important subject. They help run training for other exams, so why not help advocate this one?
There is also an immediate need for someone to step into this space and help out with the education hole that undoubtedly exists.
Advisers either need to be introduced or reintroduced to protection and the first insurers to grasp this initiative will be able to measure the improvement quickly.
Mark Jones, LV=
I have heard the argument that a flight to protection will occur for advisers unable or unwilling to pass the exams to remain in the wealth management sector and this is a material risk for consumers. I don't see it.
These are people who have been operating under the Conduct of Business Sourcebook regime for some time, who may well have been trained in the direct sales forces in the past and who are used to advising individuals on their personal circumstances.
Where advisers have not been involved in protection for some time, they will find a lot of change in proposition and fulfilment methods. But consumers' basic needs haven't changed.
If advisers can engage with consumers, get them to identify their needs and take action to mitigate them, then they will make a positive contribution.
Providers will need to recognise there is likely to be a cadre that needs support and for some, a refresher course in protection.
Generic information and tools such as simple guides to explain what the most common CI conditions actually mean will be invaluable.
Being able to find the resources that already exist is at least as important to someone not well versed in navigating providers' protection portals. Would a protection exam increase the trust a consumer has in our industry?
A difficult question, but for now I'm on the side of the existing regulation being sufficient to protect consumers and that increased skills can be delivered without the need for a final exam.
After all, the better skilled will be those best equipped to build the most successful businesses.
