A worrying number of consumers doubt that advisers are truly independent when it comes to dealing with protection products, Peter Le Beau has said.
The co-chairman of Protection Review referred to research by the organisation that showed only 21 per cent of consumers chose professional advice as their first port of call for protection products.
Mr Le Beau said consumers surveyed for The Syndicate 2013 report were sceptical that advisers were genuinely whole-of-market when dealing with protection providers, and many suspected “commission would lead to product bias”.
The 60-page report also revealed that consumer organisations Which? and the Money Advice Service were popular sources for information on protection. Some 17 per cent of consumers would use Which? and 15 per cent Mas.
Mr Le Beau said: “Many consumers do not trust the independence of advice or the fee structure, even if their knowledge of financial remuneration structures is minimal. Instead they trust their own ability to source the equivalent information regardless of their market knowledge.”
He added that advisers need to find a “21st-century way” to bring service to more consumers with protection sales, as those with an “effective online service” as well as face-to-face advice offering would “prosper most long-term”.
Similar research conducted by Aviva also found widespread inertia among consumers when it came to reviewing cover. Only 5 per cent reconsidered their protection needs after they had children or had separated from their partners.
Paul Casey, head of marketing and communications for provider Hannover Re, said the market was “littered with opportunities” for providers and advisers to re-engage clients who had left the market. He added: “More needs to be done to get that group of protection rejectors aware of the risks once their insurance falls away.”
Kevin Hever, adviser at West Midlands-based Cornerstone Financial, said: “Most advisory clients are quite receptive once they’re in the door but for the public at large attitudes are very much price driven.
“However if people recognised the complexity of protection products, and how different they are, far more would seek advice. Price comparison websites do not allow users to enter different situations and they throw up the same few providers every time.”
