News Review: Protection


Charging for protection claims a grey area


by Kevin Carr, chief executive of the Protection Review and MD of Kevin Carr Consulting


an interesting debate has been taking place in recent weeks about whether or not advisers in a post-retail distribution review world would, or even should, charge for time spent in dealing with their client’s protection claims. as intermediary Peter


chadborn of Plan money recently pointed out, many of us in the protection industry feel that the rdr adviser charging debate probably doesn’t apply because commission will remain, yet anyone selling protection products alongside other


regulated products could be affected differently. most protection advisers


who operate quite fairly on a commission basis wouldn’t think twice about helping their client through the claims process, without even considering any additional charging. However, those who seek to operate a fee-only service may find themselves with an interesting dilemma: client says: “Hello mr


adviser, my wife has just been diagnosed with cancer. i seem to remember you convinced me to take some critical illness cover, what do we do next?” adviser says: “that will be


£200 an hour please.” is that really the world we


would welcome, or should claims be left purely in the hands of the life office? We all know life office


Now that the adverts are running a number of leading figures within the protection industry have called for advisers to engage with the Money Advice Service rather than fear it. The Association of British Insurers, reinsurer


RGA and leading intermediaries such as Life- Search have urged the market to take a proactive approach by contacting the service to raise any queries and to build on information offered by it to increase sales. The service promotes independent, unbiased


advice, which has caused concern amongst some advisers, with a few challenging the use of the word advice. However, it should be under- stood that MAS exists to provide very generic and unpersonalised guidance, such as : “You should


administration can be poor – i once saw a claim acknowledged six weeks later on a handwritten compliments slip – and poor service reflects badly on the adviser too. chadborn agrees: “unless


you have experienced the traumatic phone call from a client with the heart-sinking news that they or their partner have been diagnosed with something horrendous then i won’t begin to try and explain how it feels because i will not do the sentiments justice. How can we put a price on the assistance we provide at times like this?” i doubt if any serious


protection adviser would ever leave their client purely at the hands of the life office during such a traumatic time. if and how they charge for their time is another matter.


Industry told to embrace government Money Advice Service


think about what to do about your income in retirement.” Or similarly: “You should think about how your


family would cope if you were too ill to work,” as opposed to recommending any specific products, which is where advisers can add value. Speaking at RGA’s “Write the Future” confer-


ence, Nick Kirwan, assistant director of health and protection at the ABI, suggested advisers could capture customers after they had been through the information process. He said: “As an industry we should make sure


we’re ready to catch people coming out of that process as they’re left being told they should be considering some life insurance but not being told how much and what to do next.”


Powerful in protection. To find out more go to friendslife.co.uk/protection


For advisers only. Not for use with customers. Friends Provident Holdings (UK) Plc is the parent company of all the companies in the Friends Life group. This group includes Friends Life Services Limited, which has approved this advertisement, and is authorised and regulated by the Financial Services Authority. Friends Life is a business name of companies in the Friends Life group of companies. www.friendslife.com


C50074 Mort Introducer strip_29x180.indd 2 mortgage introducer JULY 2011 17 21/04/2011 16:15


News in brief • The ABI has published guidance terms for insurers in order to reduce the time taken to pay life insurance claims • Ageas Protect is calling on protection providers to label their products according to the percentage of life cover, critical-illness and income protection elements included • Brits are twice as likely to insure their pets or mobile phones than their income, according to research from Scottish Widows • Lloyds Banking Group is preparing to axe 15,000 jobs as part of a £1bn cost sav- ing plan, according to The Sunday Times


• Barclays has promised to repay all PPI complaints in full • The average sum assured taken out by the gay com- munity has increased by over £10,000 since last year according to research from Compass Mortgage & Insur- ance Services • The number of dads hold- ing income protection has fallen by 5% in two years, according to results from Legal & General


• More than half of those with life cover fail to upgrade after significant changes in their circum- stances, according to Sains- bury’s Life Insurance


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