A month on from the Competition Commission rule change on the sale of accident, sickness and unemployment products and I am alarmed to read in the press that advisers are still wary of advising on these products. This undoubtedly remains a tough sell, with the public still reeling from the payment protection insurance mis-selling scandal involving banks and loan companies.
Keep an up-to-date paper trail of meetings with clients and give them high quality information packs
But with unemployment at an all-time high and a double dip recession now confirmed, we have a responsibility to re-educate customers and reassure them that despite the hype, ASU cover, particularly mortgage payment protection insurance, remains a vital product.
Increased regulation is not necessarily a bad thing. The aim of these changes was to prevent mis-selling from happening again and to boost confidence in the market.
In themselves the changes are not onerous and demonstrate a commitment to treating customers fairly.
I have had a number of discussions with our agents during the past few weeks and have found that they are all positive about the latest rules.
“The PPI mis-selling scandal has put a lot of people off ASU products as they see it as the same type of product, but in today’s environment it is vital for people,” one agent told me.
“Doing things properly has always been our motto, no matter what market you are in or what product you are selling. Doing things by the book is the only way to be successful in the long term.”
A bigger risk perhaps lies in the failure to advise on these products. This leaves consumers exposed to the potentially disastrous consequences of unemployment, long-term sickness or injury.
With all the signs indicating that things are only going to get worse for a large part of the UK population over the next 12 months, it is more important than ever for brokers to explain to clients all the protection options that are available to them and reassure them about the dependability of ASU cover.
Talk to your clients and establish their risks, needs and personal circumstances.
How long could they survive on their savings should, through no fault of their own, the worst happen? Information is power in this situation.
These products could make all the difference between protecting their family and keeping a roof over their heads
But make sure you have all your ducks in a row.
Ensure you are fully compliant with the new CC rules, have all the appropriate documentation in place, keep an up-to-date paper trail of all client meetings and communication, and prepare high quality information packs to provide clients with all the information they need to make the right decision.
Mis-selling was never really an issue for brokers and advisers. But don’t let the mistakes of others or fear of regulation prevent you from maintaining this valuable line of income and providing the highest possible levels of protection for your clients.
Advisers have a duty of care to provide clients with the protection that they need and ASU remains a key product offering.