SPW drops commission on protection advice

SPW drops commission on protection advice
Credit: Chris Ratcliffe/Bloomberg

Schroders Personal Wealth (SPW) will not be taking commission on any protection advice from clients when discussing wider financial planning.

SPW said the move was designed to help close the protection gap, after its research found only three in 10 adults (28 per cent) had some form of personal protection insurance.

Life insurance was the most popular form of protection, owned by a quarter (24 per cent) of adults.

But take-up of critical illness and income protection was lower, at 10 per cent and 7 per cent respectively.

Mark Duckworth, chief executive officer at Schroders Personal Wealth, said: “Having the right protection in place is the cornerstone of a holistic financial plan and a client need that we believe is currently under-served.

“There is a huge gap in the UK protection market and as an industry we should be doing more to help educate and engage consumers in this space.

“Our new proposition provides affordable personal protection as part of a holistic plan and helps us to achieve our vision of delivering more advice to more people, whilst addressing a growing societal need.”

Its research, conducted between January and February among 2,000 adults, also found that three in 10 (29 per cent) of those without cover said the pandemic had made them more likely to consider protection.

SPW only advises on protection products from Scottish Widows and Legal & General.

Its decision to forgo commission comes after research from Association of Mortgage Intermediaries last year found that half (52 per cent) of consumers thought a financial adviser’s main motivation for suggesting protection insurance was to increase their commission by making a sale.

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