UK protection could benefit from climate of fear in wake of US sub-prime market crash

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By Peter Carvill The protection industry may reap the benefits of the sub-prime crash, argued one i...

By Peter Carvill

The protection industry may reap the benefits of the sub-prime crash, argued one industry expert.

Richard Verdin, sales and marketing director for Direct Life & Pensions, predicted that a slowing housing market, coupled with the drop in lending, will bolster protection sales.

Verdin said: "Focusing on protection is one of a range of tools mortgage advisers have to maintain their position in the market and their revenue. I haven't seen a business not looking at protection."

The Financial Services Authority (FSA) has revealed that a large number of brokers failed reviews set up by the regulator. The FSA conducted reviews on 345 brokers specialising in prime and sub-prime lending. Seven firms were referred to enforcement and 65 ordered to review past business. Other businesses were forced to cease trading until they had rectified their failings.

Stephen Bland, FSA retail intermediary sector leader, said: "We found some firms willing to offer mortgages that they know to be unaffordable and to accept self-cert business even when they had concerns that the financial information provided by the customer was implausible. These practices are completely inconsistent with Treating Customers Fairly - hence the large number of enforcement referrals and other regulatory actions."

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