It’s been a year since the new consumer duty rules were introduced, and we’ve certainly seen a raft of changes in the protection market in the months since.
Firstly, we are definitely seeing firms take a more proactive approach towards protection as a result of the new rules, especially specialist mortgage and investment advisory firms.
Over the past 12 months, we have seen a de-coupling of protection and mortgage advice, so that while the mortgage deal may last a few years, for example, advisers in this space should now be contacting their client at least once every year to see if their protection needs have changed.
This is definitely a positive step as it allows advisers to take any of their clients' life changes into account on a more regular basis.
We’ve also seen changes in approach from wealth and pensions advisers, who tend to specialise in their own areas.
Previously, protection didn’t always get the right amount of attention.
These firms are increasingly adopting new strategies such as 'write it or refer it', either addressing the protection needs themselves, or referring their clients to a specialist protection firm to address those needs.
In the past year, we’ve seen more of these firms proactively put mechanisms in place to make sure they have that protection advice covered off.
Across the market, we’re generally seeing advisers increase their contact strategy and take more frequent steps to check in with their customers.
On the provider side, insurers are increasingly opting for 'modular' approaches to their products, which allow advisers to craft individual solutions for every customer.
Packages of cover can now be added or removed, giving policyholders the right level of protection at different stages of life.
This is an area where I would expect to see continued and accelerated change, and as a result there’s an evolving need for advisers to tap into the new levels of optionality available to customers through these new products.
At the moment, when seeking a quote for their clients, advisers can in some cases find it difficult to properly compare and contrast different products on portals, potentially resulting in a bottleneck where customers don’t benefit from the full range of choice available to them.
When seeking a quote, advisers are faced with multiple different propositions and a vast array of value-added services to choose from, but price remains one of the key focal points for recommendations.
In my view, this approach needs to change: value should be the starting point, tailored to the cost that the customer can afford.
A year on, we’re also seeing firms looking at how they’ve made an impact and how they evidence that impact.
We’re starting to see more firms focus on those quality outcomes, but it’s early days.
