The decision by the British Bankers’ Association to not contest the High Court verdict on payment protection insurance is a potential boon for brokers.
This decision is anticipated to cost the banking industry up to £10bn in compensation. But there could be a further indirect cost in light of the loss of trust banks will suffer in the eyes of consumers and the opportunity this will create for professional advisers.
The days when consumers would blindly put their faith in their bank have long since passed and is another nail in the coffin of that concept. But it is positive for advisers who put the interests of consumers first.
Following the financial trauma of the credit crunch, clients have never been more receptive to the idea of insurance and ensuring they have adequate protection.
Added to this the PPI verdict, which could be construed as a vote of no confidence in bank-led advice, opens up a major opportunity for independent advisers.
Insuring single items, even when arranged appropriately, is rarely in consumers’ best interests. Taking into account all of a clients’ personal circumstances and needs always offers comprehensive and cost-effective solutions.
In light of the PPI decision there is more incentive for brokers to offer a full protection review to clients with more likelihood they will be receptive to both the review and the solutions proposed.
This should be a win-win for both parties better cover and lower premiums for clients and more business for advisers.