A third of brokers may be leaving clients unprotected
The poll revealed 28 per cent of intermediaries only occasionally sell life products alongside their mortgage business, while 3 per cent never do. This has led to concerns that broker’s customers are not having their cover properly reviewed.
Pink has warned that intermediaries are losing business and income, while customers walk away unprotected. Customers may go on to get cover from another provider, like a supermarket, but the danger is that they will inadequately cover themselves or, if they do have sufficient cover, it is the wrong kind as it relies on the customer knowing what they want. The broker also risks losing the customer to the other provider entirely, as client loyalty is greater in a multi-product relationship.
Dev Malle, associate director of operations at Pink, said: “We need to assist intermediaries through the systems so they can give clients good product choice and relevant information. One reason intermediaries might not sell protection is that they do not have the time to fill out a 28-page form and ask the client all the relevant questions. An express underwriting system would make everything slicker. The industry is plagued by non-disclosure problems, so having qualified people asking all the right questions would mean there would be fewer problems.”
Roy New, a London-based sole broker, said: “Life products are a valuable payment stream and make you compliant with the Financial Services Authority (FSA), so I don’t see why some intermediaries don’t sell them. A directly authorised broker may be unsure of the FSA’s legislation, but perhaps others just can’t be bothered.
Although, I don’t see how brokers can be encouraged to sell more life products. For me, an express underwriting system doesn’t make much sense, as most insurance companies are online now and you can get a decision there and then anyway.”