The industry’ s plea is for the regulator to see the whole chessboard. Addressing high commissions is one move; but if that leads to fewer advisers and more underinsured families, the net result could be negative. The challenge is to fix what’ s broken while preserving the parts of the system that deliver value.
Inclusion: Serving all customers A particularly heartening aspect of the FCA’ s study is its focus on inclusivity. The regulator has explicitly stated its intent to examine access for consumers outside the typical“ healthy life” profile. This includes those on low incomes, in precarious employment, or with pre-existing health conditions.
Trade bodies like Fair4All Finance have highlighted the stark reality: nearly a quarter of financially vulnerable individuals have no protection cover at all. The industry sees this study as a chance to change that.
Intermediaries have praised the FCA for listening to stakeholders and expanding the study’ s scope. There’ s hope that the findings will lead to more tailored products, simplified underwriting, and partnerships with community organisations to reach underserved groups.
The goal is not just to ensure fair value for current customers, but to bring protection to those who currently have none. This is a shared ambition across the industry and one of the most collaborative aspects of the study.
Transparency and understanding Another recurring theme in industry commentary is the need for greater transparency. Protection products can be complex, and consumers often struggle to understand what they’ re buying. The FCA’ s focus on“ Consumer Understanding” and“ Customer Support” under the Consumer Duty is a welcome development.
Advisers are calling for clearer distinctions between advised and non-advised sales, standardised disclosures of commission and services, and better comparison tools. The aim is to empower consumers to make informed choices, whether they opt for advice or go direct.
There’ s also a push for insurers to take more responsibility for how their products are marketed and sold. The PDG has urged the FCA to ensure that insurers monitor the behaviour of intermediaries they pay commissions to, fostering accountability throughout the distribution chain.
The industry expects outcomes such as enhanced value metrics, updated sales standards, and possibly structural changes to commission. Some firms are already training advisers to articulate the value of advice more clearly, anticipating a future where transparency is paramount.
There’ s also excitement around innovation. The study could prompt insurers to simplify products, streamline underwriting, and explore new distribution models. Advisers who embrace these changes will be well-positioned to thrive in a more inclusive and transparent market.
Conclusion: A chance to lead For advisers, the FCA’ s Pure Protection Market Study is not just a regulatory hurdle- it’ s a chance to lead. By engaging constructively, demonstrating value, and advocating for balanced reform, advisers can help shape a market that works better for everyone.
The protection sector has much to be proud of: high claims payout rates, low complaint volumes, and a strong advisory culture. The challenge now is to build on that foundation, ensuring that more families are protected and that the experience- from buying to claiming- is as fair and smooth as possible.
If the industry and regulator continue in this collaborative spirit, the outcome could be a protection market that is fairer, more transparent, and inclusive- yet still dynamic and robust. That, ultimately, is what everyone hopes to achieve.
Simplybiz is always here to support you, so if you want to know more about any of the topics discussed in this article, then please contact our Protection team at Protection @ Simplybiz. co. uk.
Preparing for what comes next As the FCA gathers data and prepares its interim report, advisers should be proactive. This means reviewing advice processes, documenting suitability, and preparing to justify commission structures. It also means engaging with trade bodies and contributing to the dialogue around potential remedies.
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