Advisers should not wait until the Financial Conduct Authority (FCA) forces them to place policies in trust or set up wills and powers of attorney.
This is according to Johnny Timpson a member of the regulator’s Financial Consumer Services panel.
He spoke to Health & Protection for World Alzheimer’s Day about whether setting up a lasting power of attorney should be made mandatory as the number of people suffering dementia and Alzheimer’s grows.
The Financial Conduct Authority’s pure protection market study interim report, released at the start of the year, addressed the topic of lasting power of attorney specifically.
In it, the FCA said: “We’ve seen examples of intermediary firms going further than others at point of sale to support customers if/when they eventually come to claim, such as placing policies in trust, and setting up wills and powers of attorney.
“The more widespread such practices become, the better the outcomes for consumers if/when they need to make a claim.
“We want to encourage this as it aligns with our expectation under our existing rules and is a clear example of good practice. We could use existing or new rules and/or guidance to achieve this.”
Issue not going away
And while lasting power of attorney was not addressed specifically in the final report of the market study, published yesterday, Timpson told Health & Protection this issue was not going away.
“What the FCA is saying to the industry is, sort this yourself, and if you don’t, we’re going to come back and sort it,“ Timpson said.
“The Pure Protection Market Study is not one and done. This is just where we are now. There are issues that they are expecting the industry to resolve, and if they don’t they’ll come back and review it.“
Timpson told Health & Protection that in his discussions with the FCA as part of its market study research, he asked the regulator to impress on firms, both product manufacturers and distributors, that to move the dial on improving individual financial protection outcomes they need to put far greater focus and resource into improving trust, beneficiary nomination, wills and lasting power of attorney uptake.
“In an ideal world whilst I would like this to be mandated here and now, I both fully appreciate and accept that training and systems change will be required to deliver this,” Timpson continued.
“But, I do hope the FCA enshrines this expectation and sets the industry on this direction of travel.”
But Timpson also called on the Chartered Insurance Institute (CII) to consider how it can improve the professional development of protection practitioners and better assist them to improve consumer outcomes.
This is particularly in relation to trusts, beneficiary nomination, and lasting power of attorney guidance recommendation and uptake.
Don’t wait for the regulator
Though Timpson concluded advisers can always act now.
“All of this said, I say to distributors, let’s not wait for the FCA to tell us.
“There is nothing to stop you adopting a policy and practice of improving client trust, beneficiary nomination, will and lasting power of attorney uptake now and joining those firms who already are,“ he said.
