Go grab yourself a cup of tea; we're in for a bit of a ride with this one.
I'm going to take you back to 2008, to Gleneagles, when the famous speech was made that turned the regulation of financial advice upside down.
Initially this was greeted with positivity: enhanced professionalism, greater consumer protection, a question of improving trust and boosting the reputation of financial advisers, so the likes of Mark Hoban wouldn't make wry comments in the House of Commons about Maccy D qualifications.
But by 2010, consultation after consultation and hundreds of responses and committee sessions revealed there was a huge disconnect between what the then Financial Services Authority was trying to do for investment and pensions, and what might happen to the world of insurance.
Financial Adviser's big pink pages were covered with stories of insurance brokers and providers alike warning of the immense consequences of imposing a widespread commission ban on all advised financial services products.
Deputations from the protection profession spent hours inside meetings in the old FSA offices in Canary Wharf, explaining concepts such as "protection is sold, not bought", and the importance of allowing commission payments to continue on insurance products.
One argument - that it is hard enough to provide vital cover for people with a monthly premium, let alone suddenly switching to upfront and/or annual fees - among others carried the day and the commission ban only applied to those rare insurance products that were backed by investment.
Another argument was that a significant number of financial advisers are recruited and trained up via the mortgage and protection route, necessitating a means of providing income to much-needed newcomers who are learning on the job.
In the end - as we reported at the time in 2013, insurance commission was excluded from the outright ban, and provisions were even made for those mutual societies who sold Holloway income protection products, so they did not have to adhere to the Retail Distribution Review’s criteria.
This meant that advisers could still receive commission and did not have to hold level four qualifications.
Well, most advisers now are at least level four or higher as part of an overall push for professionalism - and the commissions remain.
Direction of travel
But will they continue to do so?
In its latest missive, the regulator has outlined its consumer duty priorities for the life insurance market over the next two years after finding "significant failings".
According to its Insurance market priorities 2023-2025, the FCA stated that, when looking at specific areas of the industry, it found “significant failings”.
In it, the FCA stated: "For the life protection market, through our thematic review of Prod 4 rules, we are testing whether protection products are delivering fair value to customers. We continue to engage with insurers to identify where there may be evidence of poor outcomes.
