LTC sale demands advice

The debate concerning whether CAT marks should be introduced to long term care (LTC) insurance has been pushed to the forefront of discussions following an inquiry by the actuarial profession into the levels of advice and information being provided to consumers when buying financial products.

The report, published by the Institute of Actuaries, said consumers could benefit from improved access to advice but that kite marks ' such as the CAT standards proposed in the Treasury's consultation paper in March ' are no substitute for expert advice.

Responding to the report, Sandy Johnstone, retirement and protection strategy manager at Norwich Union, said that although CAT standards could help customers get a better understanding of long term care products, they are no replacement for the protection that Financial Services Auth- ority-regulated advice can give.

'Although more customers are finding out about products from other sources, such as the press and the internet, they do still feel it is impor- tant to get one-to-one advice when they are choosing a product. CAT standards may elevate customer understanding, but regulation and regulated advice are needed in order for customers to make the right choice,' he said.

Paul Bennett, marketing manager at PPP lifetime care, said that although CAT marks can boost confidence, advice should always be sought. 'CAT marks are great for building consumer confidence especially in a developing market such as LTC, but they are definitely no replacement for advice,' he said.

Paul Smee, director of the Association of Independent Financial Advisers, said the next step for the Government and industry regulators was to work on making tailored advice more accessible to the public.

'This report recognises that advice, particularly expert and objective advice, is the most important element of financial planning. I would go one further and say that suitable advice is the key element. It is only when advice is tailored to an individual's needs that the consumer will gain any real benefits from it. And the need for advice has never been greater, with increasing access to it an issue which is now being addressed,' he said.