Defaqto Protection service review results announced

26 February 2019

In the 2017 survey, advisers were recommending, on average, 5.4 individual protection products; this year the figure has fallen to 5.3.

Financial information business Defaqto has published a review of the service provided by protection providers as rated by financial advisers. The independent publication provides financial advisers with insight to help them benchmark their own personal experiences of protection providers, with those of their peers, enabling them to select partners based on service criteria.

Defaqto asked advisers which individual protection products they had recommended in the last 12 months. In comparison to the 2017 survey, there is no change in the relative position of protection products. However, support for a number of important products has decreased.

Products receiving more support from advisers are mortgage payment protection insurance and decreasing term assurance with a three and two percentage point increase respectively. This may suggest a renewed interest in mortgage-related sales among advisers.

It is interesting to note that support among advisers for Guaranteed Acceptance Plans increased whereas, there was a marked decrease of six percentage points in support for underwritten whole of life.

In terms of the individual protection products used by financial advisers, the sector continues to be dominated by level term assurance, critical illness with life cover and decreasing term assurance

As a new addition to the survey this year, Defaqto asked advisers what interest, if any, they have in pre-paid funeral plans. Of those asked, only 9% of advisers said they recommend pre-paid funeral plans.  An industry consultation initiated in June 2018 will, most likely, result in this market coming under FCA supervision; consequently, this product may garner more appeal to financial advisers in future.

 Service Satisfaction

Advisers ranked ‘claims handling and administration’, ‘underwriting services and ‘new business processing’ the most important aspects of service. In addition to rating the importance of each service category, advisers were also asked to rate their own experience with protection providers to identify gaps in satisfaction experience.

For 2018, satisfaction levels are generally lower than in 2017. With the exception of claims handling and administration, which improved by four percentage points, and new business processing, which remained steady with 80% satisfaction.  On average the weighted satisfaction declined for all other categories by two percentage points.

Worst hit were underwriting services, down six percentage points, and technical assistance, down eight percentage points. This may be due to continuing moves by insurers to deliver intermediary protection business via technology platforms. While overall this is a good thing, it may also give rise to dissatisfaction among advisers where there are initial teething problems.

Advisers were asked to rate the service they receive from protection providers in relation to ten categories:

 

Satisfaction category

Importance

Weighted Satisfaction

2018      2017

Claims handling and administration

1

57%

53%

New business processing

2

80%

80%

Underwriting services

3

72%

78%

Product design

4

76%

77%

Online services

5

65%

66%

Technical assistance

6

54%

62%

Existing business administration

7

61%

66%

Provider strength and brand

8

71%

72%

Commission and remuneration

9

57%

58%

Business development managers

10

35%

39%

 

David Cartwright, Head of Insight and Consulting for Wealth and Protection at Defaqto, comments:

“The study sets out to measure how satisfied advisers are with their preferred providers and identified where expectations were being met by cross-matching ranked importance to ranked satisfaction. Conversely, underwriting services and claims handling and administration are ranked in the top three for importance, but the performance is below par. The message for the protection sector is that more attention needs to be given to these areas to improve satisfaction.

“With many providers offering similar products, service is a key deciding factor for advisers when it comes to product selection. We ask financial advisers to rate the services they receive. This collective information helps the industry in continuously improving standards.”

Download a copy of Defaqto’s Protection service review: https://defaqto.com/advisers/publications/protection-service-review-2019/?utm_source=press%20release&utm_medium=referral&utm_campaign=protection%20service%20review%202019

About Defaqto

Defaqto is an independent financial information business helping financial institutions, advisers and consumers make better informed decisions.

The company offers a complete package to support financial advisers with their investment advice. Defaqto Engage is an investment planning software tool designed for advisers.

Defaqto experts research, collect and continuously assess over 43,000 financial products including funds and fund families. Over 17,000 funds are analysed including fund performance, risk adjusted return ratios and costs which adviser can use to filter, sort, rank and analyse the options to make the most suitable recommendation for their client.

Engage has a variety of workflows, from risk profiling through to research and recommendation. It can service a range of clients, whether they are looking to grow their wealth, consolidate assets or withdraw an income, generating an audit trail to satisfy regulatory requirements.

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