More advisers are being urged to talk about protection with their clients as figures have shown only about 4 per cent of advisers who can write protection are doing so on a daily basis.
Research by Johnny Timpson, chair of the Access to Insurance working group, showed that while about 44,000 advisory firms have protection permissions from the Financial Conduct Authority, only 4,000 write protection on a frequent basis — under 10 per cent of all those who can.
The figures, taken from the Scottish Widows database of business written by advisers, also showed that on a daily basis activity falls to less than 4 per cent of potential advisers, to sit at 1,500.
Mr Timpson said: "It’s clear the conversations are not happening. It’s so important, especially when you look at what’s happening to the welfare state and the benefits available."
He said the support offered by the government had slowly chipped away over the past years — such as a reduction in bereavement support and a shake up of mortgage relief rules — and had left many consumers without a safety net.
Advisers who do not want to work within the protection system should "signpost" their clients to the appropriate adviser or insurer, said Mr Timpson, as this can assist consumers, brokers and providers.
He also pointed out that various regulatory changes such as Mifid II and the Senior Managers and Certification Regime were based on principles of acting in the customer's best interests, which he stressed was underpinned by the need to appropriately address consumers' protection needs.
But Craig Brown, director of Intermediary at Legal & General, said regardless of these regulations the FCA didn’t "give enough thought to protection".
He said: "I do not think they do enough to support or shine a light on protection needs and realistically, the more we can do, the better.
"It’s really important the industry, including the regulator, and advisers have these conversations."
Mr Brown added that protecting a consumer against their mortgage debt and ensuring they could not only buy a house but were able to stay in it was a "duty of care" that the FCA did not promote.
Scott Cadger, head of protection underwriting and claims strategy at Scottish Widows, agreed that more advisers needed to discuss the value of insurance.
He said: "Protection should be the cornerstone of all conversations between advisers and their customers.
"An IFA’s role is to help people save for the future and meet their aspirations – but without an adequate safety net, customers may end up dipping into their savings or investments should the worst happen."
Many advisers paid "pure lip service" to the idea that protection is supposed to be considered the "bedrock to financial planning", according to Justin Harper, LV.
He said: "Shouldn’t every advice conversation include protection? We’re far from that idea.
"Many advisers ‘specialise’ in wealth management or mortgage advice. They deal with clients every day but can often ignore or avoid protection."
imogen.tew@ft.com
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