‘Minimal qualifications’ still an issue
Whilst advisers were largely keen to rally round the life insurance sector and defend it, Cooke did acknowledge the issue of “minimal qualification” which the story also raised.
“The plan itself isn't dodgy,” he explained. “But the way it was sold may be if it was not fully explained to the client how the plan was being set up and what that might mean down the line for their cover or premiums.”
Cooke continued: “Of course, years ago many advisers had minimal qualifications themselves and an ability to sell the product often came above an ability to understand it.
“Somewhat frightening is the fact you still don't really need many qualifications to sell life cover.”
Cooke cited an anecdote of his own. “One well known insurer launched with advisers running networks of agents to sell their plans, all signed off by a qualified adviser. One guy near me recruited a load of agents - teachers selling in their spare time, personal trainers. One guy I met networking had been in marketing for a brewery."
He added: “When one relatively small sale could earn you £300-500 or more, you can see why it was tempting to these people as a side hustle. Or even as a full time job. Despite the fact they mostly didn't have a clue what they were doing.”
ruby.hinchliffe@ft.com
