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Here come the Ambulance chasers!

Journalist: Protection 1st, Freelance

ended 31. October 2023

We've all fielded calls to reclaim missold PPI, many who have taken out poor credit loans and pay day loans face regular calls to check whether these lenders checked their ability to repay these loans in a fair and reasonable way. 

With a record number of individuals off work due to long term sickness, income protection not sold (as opposed to missold) will likely be in the crosshairs of the ambulance chasers soon.

Comsumer duty has firmly (and rightly) put the ball in the adviser's court to explain the risk of inaction when it comes to protection. But we can't ‘disturb’ the client in order to ‘sell’ (heavens forbid). 

However when the inevitable happens and the call centre lawyers turn their attention to life products, is it entirely on us? Are there other factors at play such as clarity of sales processes, confusing provider products, general apathy to the products, and the whole ambulance chasing culture itself? 
 

 

7 responses from the Newspage community

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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
The onus is always on the advising party to explain the risk, and then evidence that this risk has been brought to the consumer's attention. The customer has to take responsibility for their risk appetite from thereon, and the adviser must quote as much cover as required. Showing customers their exposure may cause a little discomfort, but in reality, this is a statement of fact. The question to every customer is, "How secure do you want to be?". The choice is theirs.
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David Stirling
Independent Financial Advisor at Mint Wealth
This is certainly a quandary and clients will certainly have selective memories if they've dodged the protection conversation and then need a claim. Advisers should try to follow a process so that a separate conversation should be had, say following a mortgage offer. All clients are different though and some are just not at all interested in protecting themselves and family... protection disclaimers are often suggested - is this a good outcome for a client though??
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Michelle Lawson
Director at Lawson Financial
Ah, the great blame culture where people blame everyone else but themselves for a few quid. This practice really needs to stop. There are the bad eggs in every industry and from bottom to top. Rather than concentrating on numerous tradespeople ripping off the general public, scammers etc they want to focus on things such as this and damage the reputation of the products designed to do good and hinder public perception and trust which can further cause greater problems.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
The responsibility as a broker is to educate clients around protection and providing options. Ultimately it’s down to the client to make the decision as to whether they want it or not. Provided it’s been discussed in detail and the clients decision is an informed one, then there is no risk around the quality of advice. Not discussing protection though is not acceptable and could leave those who avoid these discussions open to negligence claims.
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Jamie Thompson
Mortgage Broker at Jamie Thompson Mortgages
I have recently had a spate of South African clients buying their first homes in the UK. Every single one of them knew what income protection was, had it, or was rearranging it. In SA they seem to understand that income underpins everything else where as intermediaries in the UK seem to lead with critical illness cover, which does nothing if you’re off work and without income due to injury or illness for months or years at a time.
When I asked them why it’s so prevalent in SA they told me that there’s no safety net out there so you have to take it into you own hands. With SSP being just £109.40 a week in the UK for 28 weeks there’s hardly a safety net here either.
Why IP isn’t the first part of the protection conversation with most advisers I will never know.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
CMC's are everyone's favorite bogeyman and we've been told over the years that interest-only will be the next big mis-selling scandal, then it was mortgages into retirement, then it was people who took short-term deals not longer-term mortgages when rates were low... there will be countless more over the years, I'm sure. In regard to income protection, life cover, or critical illness cover, there will always be those that "don't need it", or have "cover from work", then when they find themselves in a tight spot look to blame someone else for the corner they've painted themselves into. It is however their responsibility to protect themselves and their loved ones, the advisers job is to advise them of the risks, explain the ways they can mitigate that risk with insurance and the costs of that cover. The adviser can't force someone to take on insurance, so as long as they can evidence that they have made the client aware of the risks then there is little more they can be asked to do.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
It's never been more vital to create a paper trail. If you can't evidence that you've had a conversation and issued correspondence to confirm the outcome of your protection discusions you won't have a leg to stand on as an advisor if a complaint arises.