Kathryn:           Hi everybody. We are on season six of the Practical Protection Podcast, and this is our first episode after the lovely summer of 2022. I have with me, uh, Wine McClains back, and we also have Tom agree with us today. Hi guys.

Roy:                 Hi, Kathryn. How are

Kathryn:           You? I’m good, thank you. How are you?

Roy:                 Very well, thank you. Very well. Excited to be on this brilliant podcast.

Kathryn:           Thank you. That’s brilliant to [00:00:30] hear. Hi, Kathryn. How are we doing? We we’re very, very good. How are you doing? Why? Very

Tom:                Good. Thank you. And yeah, I feel very privileged to be speaking to, uh, the legend that is Mr. Baigrie.

Kathryn:           Yeah, I’m gonna call him Mr. B. That’s gonna be it. Mr. B. Uh, so <laugh> to date, we are gonna be talking about, uh, kind of the journey that’s, um, that’s been happening, you know, especially this journey that Tom’s seen over the last 20 years in terms of campaigning for better consumer outcomes, and especially what’s happening right now to grow with the protection market. So this is [00:01:00] the Practical Protection Podcast. So, Tom, I know that you are doing things across the industry and a key area that you’ve been working on is, there’s been a debate for quite a while. I know there’s been quite odd discussions about things like advice versus non-ad advice, the need for greater transparency and for insurers to analyze really the brokers that they’re working with to make sure that we’re getting better consumer outcomes. So what’s been, what’s been going on?

Roy:                 [00:01:30] Well, Kathryn, you have to go back to of the early nineties, uh, when I realized that the, the style of business that I pioneered, really, there were others, but I think, uh, life search is, is the longer standing. Uh, and that is providing protection advice over the phone, which you could call tele advice or telesales if you’d like. Um, uh, having started that, uh, market as it were, or that sector, uh, in 1999, [00:02:00] uh, by 2003 and four, I was aware that there was lots going on in the sector with, with other players, uh, that frankly was substandard, uh, and that, uh, consumers were not getting great service through the phone. Uh, in those 20 years, life search has been on its own journey to improve what it does, uh, and make sure that it’s by standards are equal to those of face to face advisors, uh, as well as being in theory more convenient for the customer, obviously.

Roy:                 Uh, [00:02:30] and in fact, nowadays, I would suspect almost all protection advice is given over the phone rather than face to face, just in the way customers now work post pandemic. So this tele sales sector, uh, is, has become huge. Uh, and that’s great. I’m really proud of my part in all of that. But from the early nos, I started to ask insurers to make sure that it was done properly. And they have been assuring me that they do do that ever since. Um, that morphed [00:03:00] into a clear categorization, perhaps after rdr. I think, um, that piece of regulation back in 2012 was it into me effectively raging against non-ad advice, uh, non-ad advisors, uh, and their, uh, practices, um, um, versus advice. But more recently, uh, it’s become clear to me that that is not the fundamental issue. It’s not about what, um, sellers [00:03:30] class themselves as, it’s fundamentally about what happens to the customer.

Roy:                 So is what’s happening to the customer, what they expect, uh, or isn’t it? Uh, and if it is what they expect and it’s good for them, uh, and they understand it, well then that’s brilliant. It doesn’t matter how they get to buy their protection as long as they, they’re getting the right protection for them, uh, in, in a way that they understand and the way that is, is, uh, fair to them. So essentially in in [00:04:00] well recent months, uh, recent years, I’ve, I’ve moved the arguments on to simply focus on what happens to the customer. Uh, and I think it’s important to understand that, uh, the argument is now focused on that. And the fundamental reason for it needing to be focused on that is that if we treat customers well, if they have good outcomes, if they don’t end up canceling [00:04:30] their policies early on because they realize they’ve made a mistake, if they’re happy with what they’ve got, then our market can grow.

Roy:                 And I think our market has been pretty much stagnant for a very long time. And I think the cause of that, the real underlying cause of that is that a great many customers who come to our market don’t have a good time, don’t get the right kind of service for them, end up canceling the policies they bought or being told by others to cancel the policies they bought and then doing that. [00:05:00] And I think that whole front end failure to maintain really good quality behaviors in distribution, in advice, in non advice, in whatever, but in distribution, is the fundamental reason why our market is not growing. And I’m trying to convince insurers to not go for market share, but go for a bigger, bigger market. Cause I think it’s easily available.

Tom:                Tom, when do you talk about the stag of the market? Would you also concur that part of it is that we don’t [00:05:30] talk to consumers holistically about what we do anyway?

Roy:                 Yes. Yes. The, the, the challenge for a, uh, kind of communications exercise is what I understand very well. You, Royal will be one of few who remember my efforts back in the late, uh, northeast, uh, 2009 through 2011, to, to create an industry campaign for educating consumers and, and engaging them. I called it, or we called it. Uh, and that came very near to success, [00:06:00] but was, uh, scrap because we couldn’t work out how to share the funding of the four or 5 million pounds we needed a year between all the insurers. I think that was a huge opportunity missed, uh, and it, it was missed because the, the largest insurers quite simply did not want to give oxygen to smaller insurers, uh, and thought they could do it on their own 13 years later. We know they can’t because our market isn’t much bigger now than it was then.

Roy:                 And, but the underlying problem with a education [00:06:30] campaign and engagement campaign is then the nature of our business, because an insurer who spends a lot of money marketing finds the results of that marketing come through a very diverse set of distributors, disparate set of distributors, some of whom don’t wanna deal with that insurer. So effectively the effect of their advertising is dissipated, and the money is therefore largely wasted. Now, the solution to that was to build Tide agencies, uh, and, and that fell down and meant to build direct to consumer websites. And [00:07:00] that works, but doesn’t convert it at, at a, at a great rate. So in other words, someone spending money on advertising can’t monetize it, It just doesn’t pay. So, and they’ve all tried, um, over the years to, to, to, to do that brand advertising. Uh, and beyond that, I remember the great of Eva campaign, Louise Coly, um, sort of sponsored, but that ran for weeks, no more than that, and then dis disappeared, I think because the inquiries didn’t flow in <laugh>, it didn’t, didn’t really happen for them.

Roy:                 Uh, and and so [00:07:30] you, it’s all very well to say we should be telling our story to the consumer, but we’ve not found a way of doing it yet. And I think the underlying problem with that is the structure of our market. And that’s a given. You’re not gonna change that. So it would be great if there were retailers, distributors who had the wealth to engage in, uh, really proper consumer engagement campaigns. At the moment, all you see is lead generation advertising, uh, from distributors, whether it’s on daytime [00:08:00] TV or, or obviously online. Um, and that’s better than nothing. Um, and, uh, the, uh, I’m not really sure how we get beyond that.

Tom:                It is the other problem potentially that we talk about protection advice and, and the investment advice and pensions advice, but obviously to most consumers, they just see us as financial advisors, per se, is they’re there for a problem that as an industry, and I’m talking about as an industry and as a whole, we’re not portraying how important protection is alongside one’s [00:08:30] pension, one’s mortgage, one’s investments, you know, everything else financial, that the consumer is seeing.

Roy:                 Oh, yes. I mean, that, that, that’s ab absolutely true. Um, there are two aspects to that, actually. One, the, the consumer really has no means of understanding the difference between advice and guidance or non-ad advice or sales. Really, it’s all the same to them. It’s someone who’s pretty credible down the end of the phone or face to face. In fact, just telling them stuff, uh, and asking them to make a decision based [00:09:00] on the facts presented. So that, that’s a, um, that’s, that’s a, a deep underlying flaw in the way regulation has sought to address what happens to consumers. Theca made clear in the consumer duty paper, uh, that, that they don’t wanna address that. That’s not what they’re about this time. Uh, and I think that is a huge error on their part. But beyond that, uh, the, the, the wealth, you know, I, I was a, uh, a financial advisor and then a wealth manager, and then a, a, [00:09:30] a financial planner, the kind of evolution, if you like, uh, of, of that market, uh, focusing on ever more wealthy customers, because that’s what the regulator essentially drove us all to do YouTube.

Roy:                 Uh, and yeah, the protection side of it is, is the least interesting. It’s the least sexy. It’s also one that causes the most problems, because particularly if you’ve got wealthy clients, they’re generally in middle age, uh, and the people you really wanna manage their pensions for, But do you wanna get them through underwriting? And if you don’t do it every day, if it’s something that [00:10:00] your, your team just does once a week or whatever, oh, how do you choose the right insurer? Your professional knowledge isn’t up to scratch. And for the sake of, uh, giving the customer a piece of advice, he doesn’t really want getting him to buy a policy that he sort of only Yeah, he’s buying because you’re told him to. Um, you end up risking your whole relationship when the insurer somehow, you know, doesn’t underwrite it properly or they get rejected or, or, or whatever.

Roy:                 Um, so yeah, it’s a very different discipline, uh, which is really part of why life such was set [00:10:30] up in the first place. To say, this is a specialist market. You need to do it as a special standalone specialism. Uh, and we continually market our services out to wealth managers, uh, as being the place to send their people and some Saunderson House and Paradigm Norton, two of the very best, they send us their customers. Um, but generally speaking, wealth managers don’t like talking about what we do. It’s, it’s okay, I can understand why. Um, and, uh, it’s up to us, the protection market to get out amongst them and say, Come on, here’s an easy route to transact. Pass [00:11:00] us your customers. We can be trusted. Um, because I don’t think they’re ever, I don’t think a pension advisor is ever gonna get to talk about protection. Seriously, that is just anymore when a chartered accountant does.

Tom:                So you’ve, you’ve, you’ve referenced the fca, consumer duty, and obviously coming in next year. Do you see that potentially therefore as an opportunity to go out again to our wealth advisor, Mortgage Advisor, cousins, and just retalk about this subject? And obviously, um, in particular, um, and Katherine will be, uh, astounded. It’s taken me 10 minutes to mention the word signpost. [00:11:30] Uh, but, uh, is is, is this a, a great, uh, opportunity to, to revisit this in the context of consumer duty in particular?

Roy:                 I hope so, Roy, but I’ve watched principles based regulation since it first was thought of, but I can’t think who that was. I’m trying to remember which FCA boss it was, or actually FSA boss. It was,

Tom:                Was it

Kathryn:           Hector Hector’s house?

Roy:                 Hector Science? Could have been, could have been. Uh, any number of them have passed my door, uh, passed [00:12:00] by. Really, I, I met most of them. Um, and, uh, yeah, they are civil servants passing through doing what they think is right. The trouble is that they’ve, they’ve utterly been unable to, uh, what’s the word? Do the hard yards of regulation. The bit of regulation that really matters is enforcement, but enforcement is police work. You need big teams, you need dogged efforts. You’ve gotta take people through courts. Their defense lawyers are very good. It’s [00:12:30] hard to enforce rules, uh, ask the police for gonna sake, lots of stuff they don’t even enforce, you know, burglary and stuff isn’t even investigated anymore in many parts of the country. So this is tough stuff to do. And so the regulator effectively has stepped back largely from doing the enforcement, uh, and under-resourced their enforcement teams.

Roy:                 And therefore keeping, uh, sorry, principles based regulation, treating customers fairly, was one of the early, early versions. Uh, [00:13:00] just simply doesn’t change that much. It does have a marginal effect generally on the bigger businesses, on the bigger, uh, businesses that have brand and reputation to consider. Uh, but on the, on the fringes of the market and in protection, we’ve got a very big and, uh, what’s the word? Uh, loose fringe, um, of small businesses that come into protection and go outta protection. And, and, and that is there in a way, it really isn’t quite so much in the investment market, though it does exist in all financial services markets, that Fringe doesn’t listen [00:13:30] to principle based regulation. It just gets on doing with what it it does to make money. Uh, and so that’s one half of the problem. The other half is that unless a compliance officer says, As a result of the consumer duty, you financial planner x need to introduce protection into your conversation.

Roy:                 And if we as a firm don’t do it, or sorry, we do do it, and therefore you have to do it yourself or get someone else in the firm to do it, or sign post to life search [00:14:00] or, or anyone else, um, unless the compliance officer is saying that, and the board of directors is confirming that it ain’t gonna happen, and the compliance officer will look at consumer duty and go, Is that a stated requirement of the consumer duty that I must signpost? Or can I interpret the principles so that I don’t have to add this extra burden of responsibility onto my already hard pressed and compliance fed up to the back teeth with advisors?

Kathryn:           Um, so it’s really interesting, actually, I [00:14:30] was gonna say, because, um, in the training that I do with, sorry, with my team and obviously, and further across the industry as well, is that, um, one of the things I say is that, you know, it might not necessarily be in your compliance. Cause as you say, compliance, I, I’m from background of compliance initially, and we, you know, people, we know people don’t like us and they don’t like us setting out new rules and stuff. But ultimately, I was say, if I was a mortgage advisor and I hadn’t done life insurance, at least probably even income protection as well, I wouldn’t wanna go up to the fo if there was a complaint against me to say, and for them [00:15:00] to turn on and say to me, So why didn’t you do that? Because you can do it and, but you’ve just chosen not to.

Kathryn:           And the same for wealth managers who aren’t doing maybe sort like the equivalent of like a gift into vivos policy or, you know, certain types of IHT planning with a life insurance. You know, it’s, it’s things that can be done. And considering, I always think the protection’s kind of seen as like beneath a lot of people, um, to do it because of the fact that it’s, you know, it’s so straightforward, It’s so easy to do, and, you know, it’s, it’s not sort of, I say it’s not sexy and it’s [00:15:30] not getting that annual return a lot of the time back to the firm as well, that you’d usually get in terms of other forms of advice. And you just think, well, if it’s that easy, then is it really that big a job for you to add it on? So why aren’t you doing it?

Kathryn:           So I, I think, you know, it’s really interesting when you come up with that. I was just gonna, um, ask you as well though, sorry, sort of taken us on a bit of a jump of conversation at the, uh, life Search Awards. Um, you’d called on insurer to start doing things like mystery shoppers to test the quality of broker services, to do some like really vigilant analysis of lapse rates and, um, clear [00:16:00] disclosures from advisors about the offerings that they’re giving to clients from the very, very start. So what is it that you were kind of thinking about in each of those EV areas? Like what’s your vision of what it would eventually look like?

Roy:                 Uh, I’m hopeful that it will, uh, look like this. Uh, there are a couple of giant hurdles to get over, but, uh, we are a long way around the, around the course already. Uh, so I, I, I can just update you, I suppose. Um, in the months before the Life Search Awards happened in March every year, uh, and, uh, during my, [00:16:30] uh, Christmas break, uh, and with Debbie Kennedy now running life search, I was able to take a long Christmas break. Uh, I spent too much time, uh, pulling together a, a seriously comprehensive report, which you can see on our website, um, about the industry. My effort in doing that was to try and get the regulator to understand several key points. And the first is the difference between protection and gi. The fact that protection is kind of halfway between the simplicities that GI has evolved to, uh, [00:17:00] in personal lines anyway.

Roy:                 Uh, and the complexities of investment advice, it sits somewhere just in the middle. And to treat it like pure, simple motor insurance actually does consumers a grave of service. So I was trying to give the regulator the, the background to the whole market. And if you read that report, I think it’s a pretty decent stab. It runs to 40 or 50 pages or something, a pretty decent stab at, at a description of a market, at a present day and time, and also an education of of why it’s like that and what the underlying factors is. Because I was trying to get over [00:17:30] the fact that regulators, like insurance company executives, are essentially transient through our market. We sit here day, year after year as distributors, and we watch, uh, the caravan aria, the greater, greater the good and the manufacturing and regulatory sector passing through, relearning the lessons we’ve learned over and over again and, and did he taught them over and over again, and we have to start again every three or four years as, as the next MD of protection arrives at whichever life company it is.

Roy:                 So I wanted to just create a, a benchmark, but in creating that, I realized as the Life Search [00:18:00] Awards came out, that I, I needed a much simpler call to action, and above all, I needed to get away from this, uh, ah, opinion that I’d allowed to form. I’d encouraged almost that there were good bad players and bad players in the market, and that life search was a good player and others were bad players. Uh, and that really, if the bad players needed to be kind of put out a business or reformed, And I realized through this work that essentially that was, that’s, that, that argument may have validity, but it’s never gonna happen. So the art of the possible [00:18:30] as, um, as lots of people call it now would, uh, um, is where I moved to. And I thought, well, what could I get the industry to do?

Roy:                 Can I get the FCA to make the consumer duty really a, a powerful thing? And the answer came through clearly in their second consumer duty paper at 2136, which had the first paper utterly watered that. So I realized very quickly that the FCA were not going to make the consumer [00:19:00] duty mean enough to stop the practices that I think are, uh, causing our market to stagnate, uh, and doing consumers real harm. So that, that’s okay. Can’t change Theca, who can you change? Well, the real gatekeepers in our market are the people that, um, that allow distributors, agencies that pay them commission, uh, uh, uh, and that underwrite their cases. So any insurer can cancel an agency and they do, uh, cancel lots of them, uh, or, or, or [00:19:30] manage agents or make sure that agents are doing the proper thing. They are natural gatekeepers. It’s a responsibility they really don’t like, and they’ve really only exercised it properly in terms of financial strength because obviously financial weakness hurts their p and l very clearly.

Roy:                 So they’ve built a really good system for ensuring that financial advisors who are on the way to going bust normally because they’re not very good at what they do, or they’re giving bad advice or they’ve got high lapse rates, that damage is minimized and they’re put out of business very quickly, [00:20:00] or not offered agencies at all. They’ve got very good at that, and that’s a brilliant thing cause it stops a lot of the ro but what they haven’t got good at, what they haven’t seen fit to add to their armory of, of, of, uh, protection if you like, uh, against bad practice, uh, is the actual analysis of what happens to the customer. They do bits and bobs of it, but anyone in retail knows that the way you find out what’s happening to a customer is you mystery shop. You just pretend to be a customer and [00:20:30] you ring up.

Roy:                 Now, mystery shopping is, is a really common and normal thing. Uh, people use it in, in all aspects. You know, people walk into stores, uh, paid to mystery shop the store and see what happens when they ask for a perfume or whatever, uh, and do that analysis and improve the outcomes. So it’s no different here, it just is done over the phone. And life search has been mystery shopping. We’ve always wanted to learn from our competitors. And, and so we’ve always mystery shopped and seen how good people do it. And indeed then you find out how bad people do it. So mystery [00:21:00] shopping in protection is a normal thing, but it isn’t something that’s ever been done on a systematic basis in order to improve the market. So the Life Search awards, I made a 15, 20 minute talk or gave a 15 or 20 minute talk in which I said, Right, let’s focus on three or four things.

Roy:                 And the first was getting the data to understand who the bad players are. You can tell that from lapse rates that we compared that the life search versus, or one a reinsurer compared, uh, life searches lapse rate [00:21:30] versus, uh, a panel of non-ad advised any sales firms. That was the panel they considered. Uh, and, but that’s not my argument here. Let’s be clear, uh, that particular panel yielded 38% lapse rate more than double, I think what life searches was. Um, uh, uh, over the first year, uh, I think the actual figures were 18% CFO and then a further 20% lapse in the first year. So they factor if those figures are anything like, right, um, from what I’ve heard, no one is actually contradicting them. Uh, then [00:22:00] that sector, and I think there are lots of advisors who you could add into that sector because their standards are so low, uh, that sex is causing up.

Roy:                 I mean, ridiculous. How can you grow a market if over a third of people who enter it are changing their minds within the first year? Some of them, right at the beginning, a lot of them, 18% is a huge proportion. So that got me going, Let’s, let’s get the data, and then how do we make the data work get worth something or be worth something? How do we affect change? Well, it’s pretty obvious. An insurer should look [00:22:30] at the data and go, Wow, this firm is, uh, is struggling here. They do that at the moment. They look at all the financials, and if they go, Okay, no, financially they are fine. They, they’re not going out of business, but then they let that firm carry on trading. That is pretty much the, the rule of firm at the moment. I’m saying, look further, use the mystery shopping to say what’s happening to the customer.

Roy:                 Oh, okay. So the customer is being deceived. Customer is getting hard sell tactics. The customer is not having status disclosed in a way that they understand. Those, I would say, are the, [00:23:00] are the three things that go on a lot, um, across all sectors, uh, of the market. And well, then the insurer can say, Listen, company X or distributor y, we, um, we’ve listened to the call. Here is the call. This is shocking behavior. You’re not doing this right. Please, if you want to maintain an agency with our big life company, uh, you need to improve this. And we will mystery shop you in a few months time, uh, to see whether you have. So please reeducate your, uh, I was gonna say advisors, and we could be advisors, it could be [00:23:30] salespeople, obviously. Um, and yeah, why not? Why not ask the insurers to do that piece of gatekeeping? And to be honest, ever since the awards, I’ve been on a journey to, uh, to make that happen, Um, which I can tell you you about in a minute, but I’ll pause there just to check. I haven’t lost you and the audience in entirely.

Tom:                No, that’s, it’s fascinating to hear. I mean, what, what, what we’re I think all calling for, and obviously you are yours much a part of the PPG as as everyone else, is a sense of responsibility. And when we hear stories and, [00:24:00] and, and, and actually some of us have, have experienced been run 21 times a day by particular institutions, that gives the industry a terrible name. And actually, I don’t think that helps with going back a, a step with, uh, some of our wealth manager, uh, cousins because they were hear new stories as well. So I think the responsibility side is, is is key here. Are are you, are you talking to, is that, are listening on the responsibility side?

Roy:                 Yes. Yes. I think I am. Uh, the, the, [00:24:30] um, so basically since the awards, um, uh, I’m throwing in a couple of holidays, uh, I have got round to not every insurer, uh, but effectively I haven’t got the friend, I haven’t done the friendlies yet, but I’ve done the rest. Uh, and, uh, I met with each of them and I asked them to institute a mystery shopping campaign themselves, uh, to define the agents. They should mystery shop using the data they have, because high lapse rates is a, and CFO rates is a key indicator of a poor, [00:25:00] uh, advisory or sales process, uh, to, to use that data and, and plenty of others, they have non-disclosure rates, uh, all that sort of thing, um, to, to identify what are the likely bad ones, uh, amongst distribution and mystery shop them and look for three things.

Roy:                 The first was harassment calling, which you refer to, I didn’t mention it earlier, but that’s lead generation sites. But then the lead generation sites are paid by the distributor. They buying the leads. So if you’ve got a lead generation site and [00:25:30] distributors themselves do the same thing using this, this harassment calling as I call it, hounding someone else called it from an insurer, then for goodness’s sake, just stop them doing that. Say we, we’ve, we’ve, we’ve submitted a lead on your website, uh, or we submitted a lead on this lead gen site and it came through to you. You are paying this lead gen site when we mystery shop you again, if that happens again, we’re gonna cancel our agency. Just don’t do it. Stop ruining our market because it’s hacking our customers off and affecting our PNLs in the long term. So [00:26:00] straightforward commercial case for instituting some discipline good behaviors amongst your distributors there.

Roy:                 There’s not a single insurer that hasn’t gone. Yeah, we agree with you, Tom. Absolutely. We, we, we agree with you that that should happen. I, I then ask them to focus on the disclosure point. Now, this doesn’t apply to advice so much, but if you are saying you’re a non-ad advisor, you have a duty to ensure that a customer understands what that means. Yeah. Understands that effectively. You’re not taking responsibility for the, the advice for the words you’re [00:26:30] saying. They are for the decision that comes out of those words. And unless you’re telling ’em absolute lies, they really have no recourse of the ombudsman. Or if their business fails, the customers no recourse to the financial services compensation scheme. So that just needs to be made clear and not prescribing as to how it should be made clear. But you need to disclose status and what it means.

Roy:                 And all the insurers effectively noded along with that one. Not quite sure. They said definitely Tom, but they, when we see your point, that’s good. The, the, the slightly non-committal answer you and I are used to getting from insurers about things, [00:27:00] but certainly support for it. Yes. Uh, and then the third thing I asked was that they listened to calls and, uh, in the mystery shop and they adopted a persona which wasn’t absolutely certain of what it wanted to buy because almost no customers are, uh, and had no questions and just went through, because that is the process that, uh, you know, we serve. All right. But it’s a tiny proportion of consumers. Most consumers have vulnerabilities, have confusions, have issues, affect everyone I’ve ever spoken to, was not making the right perfect decision for them when, [00:27:30] when it came to a bit with a bit of analysis, uh, introducing income protection, that kind of thing.

Roy:                 Also, you know, a vital part of, of what happens. So if they listen to calls and they find that those things are not happening, then they should tell the, uh, intermediary to either do those things or if they can’t assign post Roy or if they can’t assign post and to form proper commercial secure contracting relationships with the likes of you and me, uh, in, in order to enable the customer to buy from them and get good service elsewhere. Perfectly [00:28:00] feasible thing to do. So I asked them to do those three relatively simple things, Harassment, calling status, and what it means, and avoiding hard sell tactics. Can I just call that? Or stopping hard tactics. The response I got from every single insurer was positive, and I asked them all to give me a, a written statement, uh, echoing what they’d said in the meeting. Uh, and I now have collected all but two of those.

Roy:                 Uh, and [00:28:30] the plan is, in fact, the plan is, uh, actually going happen just about, uh, now, uh, that those are collated into a, a group, uh, and shared with the insurers. They’re not for, for public consumption. They’re insurers, private words effectively to each other, using me as a, as a conduit, I suppose a self-employed, a self-appointed conduit rather. Um, so that’s all gathered together and happily, the pdg, its Protection Distributors group for those who may not be immediately familiar with what is second nature to us. Um, [00:29:00] the Protection distributors group has agreed to help me, uh, get this over the line because there is a way in which the insurers can, uh, affect this mystery shopping exercise in, in a way that’s practical. The, um, the impractical way, uh, as I realized while talking to them is, is for each insurer to do it themselves. I mean, that would mean we all, all of us distributors facing 20 or 30 mystery shops whenever they, they wanted to. And that’s ridiculous. So we needed to [00:29:30] consolidate it so that there is one central place where it’s done. And I won’t go into too much detail, but we’ve got a plan for that, uh, that I, well, the pdg intends to put two insurers, uh, and hope that we, we get some progress there. That would be the start, I think, of a, uh, a change of direction in our industry.

Tom:                Can I ask you another question? Cuz you’ve obviously spent a, a good few months talking to a lot of the decision makers on the subject assign posting. You and I and Kathryn [00:30:00] totally get why, uh, an major insurer’s not gonna tell someone to go to, to live search or Kira or Karen Ware or someone specifically, but do you get the impression that they’ve bought into the concept of signposting? Because I think that, you know, a lot of, uh, iffa out there, their only real, uh, connection with, with, with the industry is via broker consultant. Yeah. And I’m talking about wealth people, mortgage people, protection people, given the, the insurance companies have bought into what we are talking about [00:30:30] in terms of side post and the principles of it.

Roy:                 Uh, yes, yes, I have, but there’s a long way between. Yes, I do, I think is the answer to that, but you can tell by my tone, uh, there’s a long way between saying you’ve bought into something and actually getting your broker consultant to go out and proselytize amongst wealth managers and preach the gospel of signposting, um, and tell them to do it. If you think about it, broker consultants, well, I suppose they, they [00:31:00] do speak to the top of the company, uh, the ceo, the board, the compliance team, that kind of thing. Those who, who build a financial advisors kind of modus opera, Randi, uh, and make sure their advisors follow it. Um, yeah, I just don’t think it’s, I don’t think it’s an imperative. Uh, again, one of the great problems with regulation is that the regulator defines what you shouldn and shouldn’t do. And if they don’t define that, then you don’t do it.

Tom:                You don’t do it yet.

Roy:                 Yeah. Oh, you do do [00:31:30] it when you shouldn’t do it. <laugh>. And so the regulation, regulation is a great big passing of the buck from individual, uh, business leaders to the regulator who then passes it back to them through the senior managers conduct regime and, and, uh, the insurance distribution directive and those kind of things. But between that passing one way and then passing the other, uh, the dos and don’ts get watered down into a position where you can, if you want to, uh, and given the lack of enforcement, there isn’t a huge imperative to follow best practice. So it really is up to [00:32:00] the individual leadership of the distributor, of, of the financial advisor or wealth manager or, or financial planner or indeed insurer to enforce signpost, uh, and say to their team, You have to do this. This is, this is the relationship we have, uh, with, with a another protection specialist.

Roy:                 But then they have to go out and form that relationship. They have to do a rfp, they have to decide to use and, and accept the commercials. Um, [00:32:30] uh, uh, you know, that, that, that, uh, make the whole thing, that’s an added responsibility. That’s something else you suddenly could get wrong. That’s something else that could let your people down. Unless it’s going to be a significant revenue stream as a board, you just say, Can’t be bothered. Not what we do. And I think that is right. I do think with signposting that if you try and enforce it sub regulator, right, it’s not gonna happen if a regulator said yes as they have in, as they have in the travel industry, you know, they’ve, they’ve mandated it in travel. So yeah, let’s go to the regulator and say mandated [00:33:00] in protection.

Tom:                Um, well, the reason I’m asking this, Tom, is it’s, um, and I’m sure you do as well, but I, I know lots of lawyers and accountants as introduces, but as clients as well. And it’s fascinating when you talk to them about the concept to signpost because they signpost naturally all on a day to day basis. Okay? Those two professions that we keep calling our sister professions do this naturally. Now, uh, the law society and the various chartered institutes, uh, you know, will, will, will have guidance on this, but obviously they don’t have the equivalent of insurance companies. But when [00:33:30] you talk to lawyers and accountants, they say, Well, we do this anyway. Well, you know, surely you do this as well. And I think, I think it’s, it’s extraordinary. We’re not doing it. I totally agree. No one’s ever gonna make this mandatory. It’s not gonna work, and nor should that work, but when you sometimes need to take a step backwards from our beloved industry and, and see how others do things, and it, it just, it seems that part of the, you know, the consumer, uh, the whole journey here and, and make and, and, and putting more policies and making the consumer journey more, uh, more, more pleasant to [00:34:00] deal with is, is us as an industry coming back together.

Tom:                And signposting surely is the natural, uh, is the natural panacea here.

Roy:                 You, you, you go on, you go on fighting for that, right? I’m right in your corner, I’ll back you all the way. Um, but I, I just think people tend to, in the old fashioned expressions, stick to their lasts. You do what you know how to do and that you, and you do it often because then you know how to give good service and get great results and stay out [00:34:30] of compliance trouble. That’s what you do. The moment you go beyond that, you can get into bother. So yeah, I, I, I think it’s actually up to us life search is, is, uh, uh, doubling up on its efforts, uh, actually more than doubling up on its efforts to get out there and get people, get like searches into, uh, wealth managers, uh, talking to their boards and saying, Listen, this is a revenue stream. This is a, there’s a commercial imperative here. It’s good for customers and it’s good for your p and l. Let’s do this. [00:35:00] And they all, I’ve never met one who didn’t say, Yeah, that that really we, we should do more protection for our customers. But the step from that acknowledgement, as I I said earlier, to actually doing something about it, to mandating it to, to getting it there, there’s got to be an imperative. And the commercial imperative is very strong if you make the case properly. So,

Tom:                So

Roy:                 Let’s get out there, and I’m sure we all are. It’s just a question of it up. And so un until, you know, it takes time to get people to, uh, to, to buy into slightly new concepts, you [00:35:30] have to put a lot of effort into it. And when you get them to, then suddenly there’s a good business there.

Tom:                It’s also, as was pointed out, glitch yesterday, quite an interesting diversification as well because, you know, when, when, uh, a lot of wealth managers are dependent on, uh, you know, funds under management and suddenly, you know, markets go down, well, obviously they get hit straight away. So there’s, there’s that argument as well with mortgage brokers. I mean, you know, with interest rates that, that the way they’re potentially going, suddenly the mortgage market might, uh, uh, have ramifications. And I, you know, knowing [00:36:00] a lot of these guys as are doing the mortgage side, uh, you know, when, when the credit crunch came along, you know, historically those that were doing protection actually had a, uh, a padding to their business models as well because they had that diversification. So there is a commercial reason for, for looking this as well as hopefully a moral and ethical one as well.

Roy:                 Yeah. And I think then though, we can just join that circle for them. You mentioned it earlier, for them to be, to get into this mood, uh, yep, you’re right. This, this is a propitious time [00:36:30] to be out marketing. That’s, that’s why it’s become very central to our new business development efforts going forward. But what has to happen is that the image of our market in their eyes is good. Yes. And the way our market treats customers is excellent. And I can honestly say that I think those two things are true of life search, and I’m sure they, they’re true, uh, of, uh, cure and, uh, your business. Where are you at now, Roy? Remind [00:37:00] me.

Tom:                <laugh>, Cav ware.

Roy:                 Cav dishware. Were not standing firm.

Tom:                I know they’d be a dig at one point. <laugh>, I’ve only, I’ve only been with two advisors, Tom, you know,

Roy:                 Me too. Bakery, Davies, Navy Davies and life, That’s me. That’s me. And 40 years. The, the, um, uh, so I’m sure your firms are excellent too, but the, the, the image of our overall industry is deeply clouded by the practices that I talked about earlier. So if we can get the insurers to stop those, [00:37:30] well, I don’t think we can, we can get the insurers to come out against them loud and clear, do mystery shop and to privately call out their agents and say, Stop doing this. As that happens, I’ve also asked them to publicize, not agent by agent, but anonymized data as to what they’re finding. Yeah. Uh, they, they, they, they’re very reluctant to publicize the data they collect. Uh, they just are. But I think if you publicize the good that you’re trying to achieve, if you publicize how, you know, this is what we found.

Roy:                 [00:38:00] This is the, the number of agents we told to reform, this is why we told them to reform, this is the effort going on. If you publicize that what you build is a zeitgeist, you build a trend in the industry which says, Hmm, we need to get better at what we do. And the way I’ve, the phrase I’ve used is that we need to stop trying to be as bad as we can get away with at the bottom end of the telesales industry I’m talking about. Yeah. Yep. Tele sales protection market, shall I call it? We need to stop, uh, [00:38:30] accepting or or seeing being as bad as we can get away with as, as a good business model. Cause it does make money. It can make money if it’s done well. Um, and we need to start trying to see how to be, start being as good as we can be.

Roy:                 So I’ll just, just sort of crystallize that. What I’m trying to get insurers to do is understand that they can change the direction of travel of our market. They can move us from the trend currently, which [00:39:00] is to being as bad as you can get away with to a new trend, which is to be as good as you can profitably be. And if they just start that effort, they can just have three or four goals at mystery shopping and correcting and challenging distributors will change their ways because I think one of the great misconceptions is that it’s, it’s really hard to give good protection advice. [00:39:30] It really isn’t. It’s really very easy to give good protection advice if you get into the minutia before the call. You two are talking about relevant life cover, okay? You’ve gotta have specialists in your team who get that sort of stuff referred to them, or you’ve gotta get your advisors individually up to a very high standard of knowledge.

Roy:                 But either way is acceptable, either way is acceptable. But getting protection advice to a good standard is very easy. Um, and you, you can, you can, you can do it in non-ad advice as well. You just have [00:40:00] to be clear about your status and what it means to the customer and signpost to advice when that is what the customer needs. And a lot of non-ad advisors are now building their own advice arms, I think for that. They, they see this as true themselves. So what I’m asking insurers to do is accelerate the process. And it’s not just non-ad advisors. I do, I do understand how many really bad people, uh, distributors there are in the teddy sales advice sector as well. Uh, it’s a much bigger sector, uh, advice on teddy sales than non-ad advice. And although some of the biggest firms are non-ad advisors, [00:40:30] lots of bad firms are, are, are advisors.

Kathryn:           I was gonna ask,

Roy:                 Sorry, not bad. Not bad. Firms, Firms, firms who treat customers and in the use these,

Kathryn:           That’s the word that we would hope. Maybe, maybe that’s a good way of saying it. So I was gonna ask yourself right towards the end of the podcast about your vision for how you hope the industry will change. But I think you’ve probably pretty much said that, um, throughout, you know, but maybe if you can give us a bit of a, a summary stuff like, cuz maybe your, your key three things or something that you really want to happen. And, and maybe as well, if there’s anything [00:41:00] you know, outside of this as well that you just wanna kind of throw in at the end that you’d like people to be aware about.

Roy:                 Thank you. Uh, Kathryn, I do think people often say, Tom, you’re always so negative. Uh, you’re always criticizing, um, you know, why, why don’t you sound more positive? Uh, and, and, and I’m glad you realize that there is a clear vision shining through everything I’m saying. Uh, and the vision is of a protection market that treats customers really well. That when a customer clicks on a a Google ad, uh, and they come through into [00:41:30] our world. And that is, that is the root, uh, in which so much of this, uh, poor practice exists. So when a customer clicks on a Google ad, what should happen is they should get a clear website that gives them the choices they need, uh, and that when they click on one of those choices, whether it’s it’s by now online, that’s fine. They know what they’re doing, They’re self helping, they’re making their own decisions, they’re getting whatever information they take off that page and they’re making a buying decision.

Roy:                 That’s their call. Absolutely fine. Let them, let the, let, that’s the customer’s right to buy in the way they [00:42:00] want to buy. So there’s no question we can only influence them marginally at that point. That’s great. That’s their first possible choice. If their, their second choice could be that they just want simple guidance and a relatively quick call, that’s great. That’s absolutely fine choice. But what has to happen there is that they understand the limitations of that service, uh, and, and that they get a, uh, a result that is, is entirely fair. Uh, and that they, they understand that they’re not hearing everything they need to hear. They’re basically getting a, a verbal version of the online [00:42:30] service. Uh, and then when they come through advice, they need to get really good advice, uh, delivered in a, in a relatively simple and easy way. That’s the solution we need to offer at the moment.

Roy:                 There are lumps of it that are just really bad. I think the online trading is fine. Uh, and I think large chunks of advice are great, but there is a large chunk of advice that isn’t. And there’s a lot of non advice that isn’t the, uh, end result is that we just need to improve those behaviors over the phone. [00:43:00] And if we do that, then my vision is really simple. And that is a market that customers go, Wow, this was good. I spoke to people, they helped me, or I didn’t want to speak them, they didn’t bother me, I changed my mind. They let me change my mind. The, they didn’t hard sell me, they didn’t pressurize me. They didn’t do any of that. And that market is a market which is fit for growth. And I tell you, consumers do deep down what, what we’ve got, but they need to be [00:43:30] helped over the edge and it’s really difficult to help them over the edge when there, there’s so much bad practice going on, especially as most consumers won’t just try one solution, even if they buy from you, Roy, they’ll check their price online, they’ll go on a website and just just have a little sense check.

Roy:                 I mean, that’s good consumer behavior. Then they find themselves in this mastro of calls and they find themselves in a nightmare world and they go, Bloody hell, what is this industry Roy’s pushed me into. You go, No, no, no, I didn’t. I was trying to save you, but it’s too late. They are, uh, they are upset [00:44:00] by us. So can our market grow, uh, every year by 10% or more? I believe it certainly can. Can we grow the numbers of customers we engage with? Absolutely. Absolutely we can through all three channels. Um, and can advice be given relatively simply and easily? Yes, it can. So what a happy market that would be. That would be a market which you could really take out to wealth managers. That would be a market which could then start to engage customers more widely because distributors [00:44:30] would have the confidence in, in, in quality of what they do.

Roy:                 Uh, and insurers would have that confidence too, so that one could get together, uh, and create, uh, uh, an engagement campaign. One could actually promote the industry at large. So we just have to change the direction of travel. And the only people who can do that, the regulator is not in the picture. The only people who can do that are our big insurers and indeed are smaller insurances. And I think I’ve come up with a way that I’ll be asking them to do su uh, well actually [00:45:00] pdg get to have a look at my ideas this week. Uh, I think I’ve come up with a way which would enable them to, uh, get together and do this properly and change our, uh, our direction of travel.

Tom:                I’ll just say Kathryn, that’s, that’s a fantastic description, Tom. And, and I just wanna take some parallels of, uh, a lot of the time in the investment side, we will send people off and say, go off and look, look at it yourself. Go off to explore how land down, do some DIY stuff. How many of those consumers come back to us and say, I’ve had a look at it. I, I need some advice in it. I know my mortgage colleagues have [00:45:30] exactly the same, you know, go off and go and source your own mortgages online. And a lot of those people come back and that’s spot on what you’ve just said. The fact that we’re telling people what the alternative is, they’re going off and coming back to us, tells you that people still value advice. And uh, and, and that’s why I think the three of us are in this industry and, and ultimately have faith in this industry.

Roy:                 So Roy says what he says, and then I go, Ah, Roy, can I, uh, can I just end by disagreeing with you? That’s a great way to end. It’s not about advice being the absolutely [00:46:00] best solution. That choice is up to the customer. What we have to ensure is that whichever way the customer chooses, they get treated fairly, Whether it’s online, whether it’s to simple form of guidance or whether it’s, uh, through advice. They need to get what they expect and the outcomes need to be right. And our insurers need to make sure that happens. And I think we’ve got a tool that we are going to present to them, which will enable them to do that as a collective group. And I’m [00:46:30] very excited about it. More follows soon.

Tom:                But that’s the point. It it is, it’s their choice. And if they wanna go off online business elsewhere, that’s fine, but at least they have the choice. That’s what I’m trying to say.

Kathryn:           I don’t think that’s, um, an interesting point for us to end on. Obviously. Thank you so much for coming and giving your insights, Tom. It’s been really, really useful. Uh, next time I’m gonna be back with Matt Ran and we’re gonna be talking through insurance options for people that have given or received an organ donation. If you’d like a reminder of the next episode, please drop me a message on [00:47:00] social media or visit our website, practical Hype and Protection dot code at uk. And don’t forget that if you’ve listened to this as part of your work, you can claim a CPD certificate on the website too. Thanks to our sponsors, the OPT members. Thank you guys.