Assuming customers only want to talk about a mortgage and not protection does not fit with a post Consumer Duty world.
This is according to Stacy Penn, senior policy adviser at Association of Mortgage Intermediaries (AMI) (pictured), who was taking part in the second day of the Income Protection Task Force’s Income Protection Awareness Week.
Research released by the body towards the end of last year showed while 96% of mortgage advisers said they had a protection conversation with clients, just 21% of clients recall protection being mentioned.
The research also showed 44% of advisers believed that Consumer Duty will increase mortgage brokers’ focus on protection.
Updating the online audience on AMI’s work to help advisers get to grips with Consumer Duty, Penn revealed this has focused on helping advisers think through their approach to protection.
Recognising the risks
“So where you are advising on protection, I think the aim really is to ensure that customers are putting in an informed decision,” Penn continued.
“So they are equipped with enough information to be able to think okay, I know all the facts and I understand what this all about.
Information asymmetry
But Penn reflected that there is a lot of “information asymmetry” within the sector where advisers know a lot more than the average customer – meaning they cannot make assumptions about their motives.
“I’ve heard some people talk about, well, the customer only wants to purchase their house, they’re not interested in protection,” Penn added.
“I don’t think that approach really fits with Consumer Duty because you are making that assumption on behalf of the customer.
“Your job as the adviser is to equip them with the information. So I’m really hopeful that Consumer Duty will have a positive impact on the quality of protection conversations as well as the number of them that are taking place.”