FR: You recently helped launch ‘Ciindy’, an online character to help consumers with any questions they have about insurance - what are the most common enquiries you’ve been receiving?
The public are generally confused (and distrusting) of a lot of the communications they receive from their financial institutions so many of the questions are actually relatively straightforward. How No Claims Discount actually works is a common question as are questions around how to make a claim. Concerns around travelling to Egypt after the issues experienced at Sharm El Shiekh airport prompted lots of questions about what travel insurance covers you for and during and after the recent winter floods we’ve seen lots of users wanting to get a handle on how to get flood insurance.
FR: What more can be done to educate brokers about upcoming regulatory changes?
Anyone running a business is clearly going to spend most of their time focusing on serving the needs of their customers. Increasingly though the pressures of regulation are taking up more and more time (and expense). This doesn’t seem likely to change for the better any time soon so it’s important that brokers actively learn more about what demands are being placed upon them. Personally I believe that it’s important to engage with the regulator early on in their consultations or reviews. That way you can have input into policy decisions and more importantly ensure that unintended consequences aren’t mistakenly implemented. Register for updates from the FCA and make sure you read anything relevant they publish. Social media is a great way of staying abreast of developments but make sure you follow organisations that have genuine insight and aren’t just pushing their own agenda - as it could well be different to yours.
FR: Do you think the protection gap is narrowing?
There are lots of people competing to access the pounds in a consumers pocket and unfortunately planning your financial security is rarely a high priority. The profession is doing what is can to encourage the public to recognise the importance of protection but a historic lack of trust, absence of government incentives and a general ‘live for today’ attitude by most consumers suggests that the gap will exist for some time to come. My belief is that it will require a generation to experience the pitfalls of not having suitable protection (or pension savings) before we will see any significant change. People will, understandably, believe that bad things won’t happen to them – up to the point when bad things happen. Unfortunately living through bad times may be the only way to convince individuals to take protection seriously.
FR: What can be done to help promote the benefits of financial advice and make it more accessible to lower wealth consumers?
Despite all the noise around possible solutions I’m not sure there’s a ‘silver bullet’ answer. Simpler products could have a role to play, as could robo-advice but the needs of the mass market are frequently as complicated as the high net worth sector so a one size fits all solution seems naïve. Whatever solutions are offered I think the public are entitled to expect them to be fairly priced, fit for purpose and consistently and competently delivered. Requiring that any product, advice model or remuneration method is trusted by the client would go some way to restoring public confidence something that would benefit all parties. Setting aside personal agendas and focusing on trust would serve the profession and those it serves well.
FR: What trends do you expect to see in the market over the next 12 months?
Given the insular nature of the market I expect a continued focus on regulation – it was ever thus.
However I do hope that more can be done to promote the merits of professionalism. An ethical culture and customer focused conduct underpinned by a suitable level of technical competency is what defines a professional and if we are to become a ‘profession’ we’ll need more individuals to embrace this challenge.
If we want to be taken seriously as caring about our customers then we are going to have to start talking to them in a language that they understand. We need to acknowledge that people don’t read their policies. This isn’t going to change and the profession needs to find a better, simpler and more engaging approach to communication if it’s ever going to win over a cynical public who have been repeatedly let down over many decades. If that sounds too difficult then you need to be prepared for someone else to enter the market and do it – just think Meerkat!
