Some six months on from the launch of Consumer Duty to the market, it is useful – amid business as usual and, dare we say, a positive start to 20w4 – to take a small step back and look at how well we are delivering on the duty.
A key area is for those firms having committed to the provision of holistic advice is to ensure that the proposition that you have at your fingertips is capable of providing the best possible consumer outcomes.
The provision of solid, well researched protection advice is, as ever, as important as the mortgage advice that the customer receives; it should, in turn, receive the same reciprocal amount of attention within a firm’s proposition.
This is the position, for example, that the senior management team have taken at Try Mortgage Network and is supported by our network members.
Broadly, having a protection proposition that can provide the following in today’s world would be sensible:
To improve and maintain the market knowledge and quality of the advice
To expand the number of customer journeys available
To seek to increase the sales performance of all protection products
To provide a robust sales platform which delivers good outcomes consistently
To provide a market leading commission structure without the need for weighted premiums
By ensuring that time and effort is well spent checking that your technology has been well thought through, sales processes are full of common sense, different but necessary systems speak to each other seamlessly and will help ensure that the provision of protection advice does not become a burden.
Spending time with your advising team will prove particularly beneficial, checking that your processes are indeed robust and meet Consumer Duty requirements but, equally, these have been bought into by all the team.
Working with your customers you will invariably meet a mixed bag of individuals, couples, families and all with varying personal, specific and occasionally unique requirements. It’s great to meet, talk with and help people – that is why so many of us choose this profession.
With so many different customer needs, circumstances and objectives, it is only natural that you have access to as many quality customer journeys as possible, and have deliverable products at your fingertips.
By reviewing our own panel of manufacturers, we have been able to expand on our protection target market proposition by bringing in additional insurers to provide a wider coverage of potential solutions to meet customer needs. We will continue to review our proposition of course.
The protection market itself has become more complex, as insurers strive to differentiate their products in a highly competitive environment in an attempt to take greater marker share.
While a greater number of products and features made available are welcomed – adding extra choice and considerable value to the traditional protection solution – keeping on top of these developments and product or industry knowledge is another key challenge for any advisory firm.
Providing adviser businesses with direct support and training from both within the firm and from suppliers themselves is, unsurprisingly, a simple but effective way to help advisers deliver good advice confidently and consistently.
Tailored and structured training programmes in turn can help hugely towards ensuring good customer outcomes. The key we believe is to help at a micro level, supporting individuals within the team and providing what they need specifically is a crucial and often missing element
Over many years, some advisers have not sought to provide protection, because they didn’t want to suffer the risk of clawback. Allowing your adviser team to access commission on the drip – non-indemnity – therefore seems a sensible solution.
Non-Indemnity commission accrual also has the advantage of bringing consistent levels of income and will usually pay out more than lump sum – indemnified commission – and without the financial risk.
Consumer Duty has placed a requirement on all firms to provide ‘fair value’ when advising customers on the purchase of a regulated product.
Protection products that do not have weighted premiums allow advisers to look their clients right in the eye and, indeed, for those that do, is truly something worth pointing out.
Having a programme that can incorporate the type of support services mentioned already is necessarily at the core of integrated adviser protection solutions in 2024 and beyond. It is important to note that this is not just a one stop solution but is an ongoing commitment and a journey that we are working closely with our members on.
Being prepared to adapt, change and adjust to maintain the very best customer outcomes going forward is not only sensible but necessary as technologies improve, products develop and the wealth of diverse types of customers knock at your door for help.
Martin Swann is managing director of Try Financial Ltd