LifeSearch has recently released a code of conduct it would like all protection sellers to adhere to. Should there be such a code and what does it say about this market that it should originate from an intermediary rather than a provider?
Much of the code refers to sales behaviours of protection sellers. While we believe whole heartedly in each of the points covered, there is a question as to how we would, or could, go about enforcing adherence. The practicalities suggest this job must sit with the firm itself, their network and the regulator.
As a provider, we would hope that the majority of intermediaries would have their own code of conduct that ensures quality outcomes for their customer. In reality, where there is money to be made, one will always find those willing to ignore the rules.
We must work together as an industry to promote good service. LifeSearch’s code is as good a template as any to show what good looks like.
Alan Lakey, Highclere Financial Services
Protection has slipped beneath the FSA’s radar as it concentrates on blundering through other areas of financial services. With investments and pensions, the FSA has attempted to justify its intrusions by pointing to bias and consumer detriment. It is supremely important that the industry does not provide them with any ammunition to fire in these directions.
Protection is not considered sexy, therefore the prime focus has been on wealth management, with systems devised to establish compliance and the suitability advice.
Protection advisers can be categorised as those who specialise and those who dabble. The dabblers may well be unaware of plan differences and subtleties, and may well focus on price as opposed to value for money.
LifeSearch, like many in the industry, fears the clammy hand of regulation with its comet trail of unintended consequences. Hopefully, establishing a code of behaviour will resonate with the regulator’s ideology. This should also emphasise the protection industry’s resolve to meet the reasonable principles behind the discredited TCF initiative.
It’s telling, but nonetheless appropriate, that LifeSearch should be the lynchpin of this initiative because past experience tells us that Tom Baigrie has the ear of the industry and his enthusiasm lends itself to projects such as this.
Conversely, we will all be grey and decrepit before the ABI makes any real difference – likewise AIFA, which is financially constrained and losing support on a continual basis.
Steve Casey, Friends Life
Let me start with a statement. I think that regulation, controls and codes of conduct are a good thing. They provide a framework, promote best practice and are designed to help protect the end customer. The adoption of good regulation and control can only help to build confidence in our industry.
However, as with most things, the details count. While regulation is aimed at protecting consumers, it has sometimes faced criticism for its complexity. So, the suggested proposal to introduce a code of conduct for protection distributors sounds sensible to me.
Most intermediaries need not fear what is being suggested. It is an outline of what is already best practice, so it should closely reflect how successful businesses currently operate.
As a protection provider which only distributes via intermediaries, we very much see this as a control to sit alongside the mechanisms we have in place already, which include looking at lapse rates and numbers of policies cancelled from inception.
I am a great believer in getting your own house in order before somebody else does. All it takes is for consumers to be let down by unprofessional techniques and we have lost them, and all of their friends, for life.
The LifeSearch code of conduct for brokers gives us the opportunity to demonstrate that as a protection industry, we do have the customer’s needs at the forefront of our minds.
