I wonder just what impact RDR will have on the protection industry. There are tiny shafts of light starting to show through in the form of unqualified advisers.
Protection specialist broker April has jumped right in just three weeks after the deadline, investing in a new nationwide network of protection advisers. Its main objective is to sweep up those that RDR has chucked out of other advice areas.
Then we had Exeter Family Friendly - going off its adviser seminar attendance numbers - reporting a spike in protection interest among advisers, and adding that adviser feedback had shown a buoyant outlook for post-RDR life, cushioned by protection.
In theory it's all positive; more protection advisers, more face-to-face selling, more policy sales. But at the minute, it is all just theory. And while I tend to agree with projections that 2013 will see more protection specialist advisers and more protection being sold in IFA firms, we are in an industry that is characterised by its flatness and its ability to balance out any potential upturn in sales.
Let's take the example of mortgage market collapse in 2008. Everyone said, just like now, that protection sales would score as flailing mortgage advisers scratched around in their back books for uninsured clients to buffer their financial woes.
But it never transpired. Yes, mortgage advisers ramped up their protection sales, but there were less mortgages being sold that would ordinarily have pushed some protection sales in the first place. Bright Grey's Roger Edwards summarised well: "The market always finds a way to compensate. It is a fine balancing act that is going on".
So in the case of post-RDR, while protection is serving advisers well - either as a supportive IFA income stream or a specialist career path for the unqualified - isn't there also the theory that RDR will force many advisers to shut up shop and take overall adviser numbers down with them? Will this be the cancelling-out effect on potential post-RDR boost in sales that seems to endlessly characterise the protection market?
Similarly, when the mortgage market picks up again, many predict a boost for protection then. But will mortgage advisers continue to sell protection in the determined way they are doing now? Or is it more likely protection will take a back seat again if mortgage business starts flying through the doors?
I am not suggesting we accept the flat pancake and just leave it to patter on. In the example of the mortgage market, there can be some action taken; the real challenge for the industry will be to keep mortgage brokers focused on protection even if the housing market lifts.
As for RDR impact, if adviser numbers drop off throughout the year there could be nothing to solve the flat market conundrum in that. But the good news for the flatlining market is, as put by LifeSearch's Tom Baigrie, when the markets are on the up, protection is boring, but when the markets are plummeting, protection is still boring.
Nicola Culley is senior reporter at COVER
