The Financial Services Authority (FSA) has made recommendations for providers of term assurance, payment protection insurance (PPI) and income protection products to consider when designing financial promotions.
The recommendations follow an FSA review of promotional material produced by providers of term assurance, PPI and income protection, including those selling directly, and are designed to assist firms in making promotions which are clear, fair and not misleading.
It says using small print to qualify prominent claims may be misleading and, while much of the press material for term assurance quotes an example premium and level of cover for an average person, in some cases small print is used to provide further information for the criteria.
In a few term assurance promotions, the FSA has found the promotion does not disclose that a quotation of premium will depend upon individual circumstances. It says firms could think about including a prominent statement making clear the quotation is an estimate and the actual premium will depend on individual circumstances.
Further, the FSA recommends firms consider including the statement “there is no cash-in value with term assurance” on promotions for term assurance where the product has no cash-in-value.
Finally, it says any statement of fact, promise or prediction should be clear, fair and not misleading.
The regulator considers it is not treating potential customers fairly to give the impression in a promotion for income protection insurance that a policy will “secure your family’s future” if the normal pay-out on such a policy will not provide the sustainable level of capital or income that dependants might expect given such a headline.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
100 new clients
Achievements, charity work and other happy snippets
Square Mile’s series of informal interviews
Partner Insight: The rise in demand for DFM and multi manager solutions has been largely driven by new mandates from the regulator, says James Bampton, head of UK intermediary distribution at Architas