Industry
Intermediaries have been warned that they will have to raise their game if they are to take a larger bite out of the direct sales market.
Guest speaker Chris Cummings, director general at the Association of Independent Financial Advisers (AIFA), said that if the current trend toward non-advised sales continues, advisers will suffer as well as consumers.
"Around 20% of all protection is now bought direct, outside of the intermediated route. Competition is healthy but customers must be told what they are giving up when they buy products directly," said Cummings.
"If people realise that they are not getting the appropriate advice they will start fighting alongside us. Bad news stories will illicit a regulatory response. We are over-regulated because we have a poor reputation, but we are working on that.
"All it would take is one mis-sale from a direct sales force to destroy the reputation of the protection industry as a whole," he continued
Cummings went on to discuss the results of the recent consultation into whether AIFA should allow multi-tied and whole of market advisers to remain in the association after depolarisation.
"AIFA values its independence and as such it shall be retaining whole of market advisers. As for multi-tied advisers, they are not part of the AIFA family so we thank them for their interest, but no thanks.
"That's why we have set up an Association of Financial Advisers for tied and multi-tied agents," he added.
Cummings also touched upon the role of the Financial Services Authority (FSA), perhaps in light of the grilling that Andrew Honey, head of department at the FSA, received from intermediaries frustrated with the regulator earlier in the day.
"Even if we were to close the FSA tomorrow we would still be left with 70% of the regulation we currently have, as this much stems directly from the European Union. We need to be in Brussels fighting our corner on behalf of AIFA members," he claimed.
"Advisers, providers and regulatory bodies all have a role to play in raising standards, increasing confidence and treating customers fairly in the protection industry," he concluded.
