ProtectionAug 28 2014

Advisers not up to date enough on protection planning cover

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Advisers need more education on protection, and insurers should intervene if the sector has any chance of ever becoming mainstream, Roy McLoughlin has warned.

The partner at London-based Master Adviser said the fact that many of his peers found income protection complicated was worrying, and is something that must be addressed by the industry.

In addition, he claimed that insurers and the government should do more to educate consumers by warning them what could happen if they do not have cover.

There has been plenty of public discourse on the importance of having a pension, but Mr McLoughlin questioned why the same level of importance had not been attributed to protection.

He added: “We need to improve the education process. People need more education and that should be a consumer-facing solution taken up by the government and insurers.

“Insurers should intervene and help to educate advisers, as well as consumers. Advisers are saying that income protection is too complicated, but it is not at all.”

Other factors that Mr McLoughlin said were crucial to raising protection awareness included releasing annual statements and continuing to publish claims statistics, which he said was key to building faith in the sector.

On this point, he added: “How could we make protection more appealing? By releasing annual statements.

“You get annual statements for your pensions and investments, but not for protection. You never hear from the provider after you receive your welcome pack.”

Mr McLoughlin also said that the sector lacked a voice, but added that things had been improving in this department thanks to better efforts from the ABI.

Adviser view

Paul Gibson, chartered financial planner for Aberdeen-based Carbon Financial Partners, said: “Many firms have moved towards building assets under management in investment and pension products, but they should not ignore protection planning as it may be the best advice that a client ever receives.”