But no, they are made of sterner stuff. Fearless in the face of regulation, they are prepared to take the risks to grab the rewards.
According to the Association of Mortgage Intermediaries, the vast majority of its members expect the amount of income they derive from insurance commission to either rise or stay the same over the next 12 months.
This is fascinating. I’d have thought that as the Financial Services Authority launches a consumer awareness campaign on the merits or otherwise of PPI, brokers might consider it possible that their income from this type of insurance could fall.
There are a lot of juicy bits in the latest AMI report. Two-thirds of respondents say that 16% or more of their income is generated from in-surance commissions.
Not all of this is mortgage payment protection insurance of course. A fair amount will be from buildings and contents and term assurance, and maybe even the odd endowment.
But despite all the grief surrounding PPI, flogging it is still an attractive gamble.
And brokers will continue to push insurance hard if it is true that many rely on trail commissions to provide for their retirement. Only a third say they do not rely on it at all.
There is concern that some insurers will try to walk away from their commitments to pay trail commission. Once one firm has successfully side-stepped the flak on this, others will follow.
It is not surprising that 77% of AMI members think that trail commission should continue into retirement. But I am surprised that when the FSA says it is going to crack down on insurance sales – it has already issued several hefty fines and there are more on the way – brokers don’t see this as a threat to their businesses.
Fair enough if they are confident their sales aren’t breaching any guidelines on treating customers fairly. But you would hope that a sustained consumer awareness campaign would result in at least some potential buyers being turned off.
Perhaps it’s not the determination of brokers to continue flogging a dead duck we should be worried about but more the FSA’s inability to change consumers’ ways.