Over a third of advisers believe an optional, industry-led qualification on with-profits advice would give them more confidence to guide clients.
Experienced advisers were just as likely as beginners to want the qualification, according to FSA research included in its Insurance Sector Briefing out today.
Extra qualifications could help improve the level of ongoing with-profits advice which is currently insufficient the Briefing says.
The main reason for this is a fear of mis-selling claims, according to respondents.
Other problems were a lack of information from providers with almost a fifth saying none of the with-profits material from providers is clear.
Three fifths of respondents said they had encountered problems in getting information from product providers.
Among those who had experienced problems, the major themes were “information being slow to arrive”(28%), problems with information being incomplete (24%), telephone operators not being able to provide the required information (19%) and “insufficient information being available on providers’ websites"(11pc).
The research found information about MVRs and MVR free periods from some providers is particularly difficult to obtain.
Around 65% of respondents said it was easier to get information from product providers with funds still open to new business than closed funds.
The main suggestions from respondents on how to improve advice levels were clearer/ better guidance from the FSA (9%) and more clear, better or faster information from providers (4%).
In the report, the FSA also set out its own expectations for with-profits advice which providers and advisers must show they are meeting by the end of December 2008 or face enforcement action for not treating customers fairly:
- Whether or not a customer has an adviser they should receive information throughout the lifetime of the product.
- Where there is an ongoing relationship with an adviser, and they have led the client to believe there will be an ongoing service, the customer should be advised how relevant market developments have affected their investment and whether the policy continues to meet their needs. If they are not going to receive this level of service this should have been made clear.
- Where advice is provided on existing with-profits investment, the adviser needs to have access to up-to-date information on the funds and be able to explain this to customers. Advice to cancel or switch a policy must be fully explained to the customer.
- The FSA said advisers are able to choose to give focused advice only, and while it is not expecting insurers to fill the advice gap, the insurers should be able to give the policyholder information that is clear, timely and helps them make an informed decision.
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 Katrina Baugh on 0207 034 2637 or email [email protected]
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