I was asked recently if protection advisers wield enough power to negotiate and evolve real improvements to customer outcomes. It’s a challenging question.
One could argue that, within reason, advisers should stick to advising and let market forces continue to create (or not) the developments needed to ensure it remains efficient and competitive.
But with so many advisers currently feeling so dissatisfied with the operational side of the market, that’s just not realistic. At least not yet. It’s vital advisers have input into the customer experience.
Often, it’s the larger distributor organisations that can negotiate terms, service levels and, to some extent, product development
The protection market is comprised of many different distribution structures. Large independent protection specialists, independent advisers, limited panel non-advisers, directly authorised advisers or registered individuals working with networks or support organisations, and more.
Some are generalists delivering protection advice when needed/requested or mortgage advisers with an integrated protection recommendation process built into their service. Then there’s the high net worth and business protection specialists and those who specialise in clients with significant health issues.
Often, it’s the larger distributor organisations that can negotiate terms, service levels and, to some extent, product development with insurers.
Protection distributors collectively lack a voice that can identify and tackle some of the areas impacting the sales process
These negotiations usually have a commercial focus in relation to commission terms available, sometimes agreed service level arrangements and occasionally access to product variations to deliver advantage to their organisations – and that’s absolutely the right thing to do for those individual businesses.
However, what protection distributors collectively lack now is a voice that can identify and tackle some of the areas that are significantly impacting the sales process, and potentially causing consumer detriment.
The Protection Distributors Group (PDG) was founded in 2016 to address this by bringing protection focused advisers together with a mission of “helping people find the protection they need by encouraging insurers and intermediaries to deliver better consumer outcomes”.
This has allowed the board to agree initiatives they want to work on that sit above the requirements of individual firms but deliver outcomes that reduce consumer detriment while also helping advisers.
While there are thousands of excellent advisers, there are a few firms damaging our industry
The Claims Charter and Funeral Pledge both deliver improved outcomes for consumers within a best practice framework, ensuring advisers are made aware of a claim while allowing insurers to continue to innovate and add a range of individual services that support a claimant and their family.
The ongoing problem of getting cases underwritten requiring traditional GP reports has been improved by the work done to increase the understanding and uptake of electronic health reports across the industry.
The PDG has created a 10-point aspirational minimum standard for insurers to address the lack of consistency on the way insurers supply information on cases where premiums are missed/lapsed, which should help all advisers and, most importantly, help more policyholders retain valuable cover.
We have also been looking at simplifying trusts and beneficiary nomination forms that will help ensure monies go to the right person.
We are grateful to organisations like the Financial Ombudsman Service, which was happy for us to publish the outcomes of our meetings
The PDG champions the benefits of advice, and we have 25 active member firms, ranging from small independent businesses and mortgage intermediaries to nationals and networks. It represents a very large proportion of the advised protection market.
While there are thousands of excellent advisers supporting clients properly, there are, unfortunately, a few firms damaging our industry and causing customer detriment. We have shared numerous examples of poor distribution practice with insurers, regulators and the ASA.
Working in partnership with other industry organisations is so important to achieve positive results. We are proud of the work done with Access to Insurance and underwriting inconsistencies, working alongside insurers for the benefit of all. Sharing results is critical, so we are grateful to organisations like the Financial Ombudsman Service, which was happy for us to publish the outcomes of our meetings with it.
Distributors need a stronger voice across the entire protection supply chain. The PDG aims to achieve this goal and we would welcome more adviser firms getting involved.
Neil McCarthy is chair of the Protection Distributors Group
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