Life offices must improve how they support general financial advisers. Plan Money's Pete Chadborn explains the issues to Fiona Murphy
Chadborn is also worried about the knock-on effect that this could have on protection sales. “What concerns me is that other firms might be finding the same thing, then there’s a danger a lot of advisers are getting turned off from protection just because of this anomaly.
"I’d like to see the industry take a more outward look, understand what is going on and the world of the consumer and adviser at large, instead of only talking to other people who work in protection.”
Another area he feels is ready for change is how the industry is reacting to new innovations, a particular example being the launch of UnderwriteMe’s proposition.
He explains: “This ties in with my point about not only making it easy for the consumer to engage with the market, but for advisers to not fall out of love with protection and help us position and process protection services more efficiently. There’s a great need for it and there needs to be more of it. Speaking to companies providing those innovations, it’s apparent how hard it is to get providers to engage. It doesn’t suit them.
Hot air from providers
“This is where there’s a contradiction. I’m fed up with hot air coming from providers about ‘Let’s work together to close the protection gap’. [In that case] why are you baulking at the innovations that intermediaries say they want? Stop adding critical illness conditions people have never heard of and stop tinkering with your plans. People aren’t [deciding not to buy] protection because it doesn’t cover them for such conditions; they’re not buying it because the process puts them off.
“Now RDR is making us more efficient with our processes, so there is a danger that advisers will be turned off as well.”
Overall, he thinks consumers are changing and traditional life offices may start losing market share to other players: one example being controversial online insurer Beagle Street.
“I think if they’re not careful they’re going to start losing market share to companies such as Beagle Street,” he says. “If you sat down with an IFA, I would sit there with my CIExpert software and look at Beagle Street’s critical illness policy and say it has only 11 definitions, but this provider has got 40 definitions. The consumer doesn’t care about that.”
