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IFAs ditch insurance to focus on investment

Advisers in the UK are stopping selling life insurance, critical illness and income protection in favour of more lucrative investment planning, research has claimed.

Despite reports on the growing number of people in the UK facing debt as a result of suffering a critical illness, research from Specialists4Protection has revealed advisers are not recommending critical illness cover - or any other protection product.

Research from the new life and protection advisory firm, which launched in October, found 72 per cent of advisers admit there is a growing threat of people not having enough CIC or life insurance.

However, the poll revealed this acknowledgement went hand-in-hand with an admission that 8 per cent of the 51 IFAs polled said they had stopped selling life insurance to clients since 2011.

This is already a huge problem and I fear it will only get worse as access to professional advice dwindles.
Paul Litser

A further 8 per cent said they had stopped selling CIC, and 11 per cent say they intend to stop selling CIC to clients.

The main reason for advisers not selling was because they "wanted to focus more on selling investment products", the poll said.

Paul Litster, managing director of Specialists4Protection, said: "The intermediary market is responsible for a huge level of sales of life and critical illness cover but as fewer intermediaries are selling this, the problem of people having no cover, or inadequate cover, increases."

Further research among 748 UK adults found 42 per cent of them were seriously under-protected when it came to the insurance cover they did have.

According to the supplementary study among consumers, Specialists4Protection found 42 per cent of individuals with life insurance only had a policy that would protect their families for up to two years' worth of salary.

Mr Litster added: "This is already a huge problem and I fear it will only get worse as access to professional advice dwindles."

Peter le Beau, founder of Le Beau Visage, also believes the demise of selling bolt-on cover with residential mortgages has also led to a lack of take-up.

He explains: "It has been hit by the drop in sales in the mortgage market and the general drop in protection sales."

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