The Financial Conduct Authority’s (FCA) incoming Consumer Duty rules will prove a strong push for the protection market by forcing all firms to consider how they approach it, according to Association of Mortgage Intermediaries (AMI).
Launching the trade body’s third annual Viewpoint report, AMI CEO Robert Sinclair highlighted that “too many consumers walk away without meeting their financial objectives and not taking protection solutions”.
But Sinclair (pictured) said he believed the regulator’s requirements provide “an excellent accelerant” for the sector.
“This will compel all firms to think about what their protection and advice proposition is, how to position the protection conversation and how to deliver it in simple language that consumers can understand,” he said.
“Making sure that good protection conversations happen will be a key aspect of insuring we avoid causing foreseeable harm.”
Opportunity to improve consumer journey
Advisers seem more cautiously optimistic about the potential benefits of the Consumer Duty to the sector.
As part of the report AMI surveyed 254 independent financial advisers and mortgage advisers, with 44% saying they expected the rules to increase the focus on protection, while 31% expected no impact.
Commenting on those findings, AMI senior policy adviser Stacy Penn said: “I feel the Consumer Duty should be seen as an opportunity to make improvements to the consumer protection journey.
“Such as communication – where can we do more to help explain terminology and review the way we layout information on our websites and documents.
“We need to champion the role of advice in helping to break down what can be confusing concepts and terminology for consumers.”
And on the topic of language, she said it was interesting to see what consumers associate with the words protection and insurance, but that it does not matter what the industry called it, as long as consumers understand the product’s purpose.