Advisers in dark over new protection CPD requirements

By Justin Cash

Jul 25, 2018

Advisers have criticised the protection industry as many remain in the dark over new continuing professional development requirements for protections sales.

Under the Insurance Distribution Directive, advisers selling protection will need 15 hours of CPD a year to meet the directive’s standards.

These must be specific to the insurance market, claims handling and conflict of interest management.

The requirements apply to both financial planners and other staff involved in selling, or transacting on, insurance contracts for all types of insurance customer.

A Chartered Insurance Institute briefing note from last year suggests that the wording of the rules could extend as far as car dealers, price comparison websites and claims management companies involved with insurance products.

Money Marketing understands that even public relations staff at major providers are having to go through the CPD, but many advisers have said they have received little to no information on what will be required of them.

CII director of policy and engagement Matthew Connell says that although the 15 hours do not need to include structured, unstructured or a particular format of CPD, and count as part of advisers’ existing 35-hour requirement, advisers will have to make sure they have covered product specific knowledge and record this appropriately.

He says: “Advisers should be making sure when they plan CPD and record it, they cover off product knowledge for protection…Advisers are doing a lot of what they need to, but need to focus on product knowledges that are a specific requirement of the IDD.

“If you were selling protection, hopefully you have some kind of process for keeping up to date with the products you are selling. It is a fairly broad definition that includes anyone involved in the distribution in a customer facing function, but again, hopefully people are doing ongoing training for their job that includes the IDD requirements.”

Concerns have also been raised over whether the new requirements will increase the protection gap if advisers decide not to undertake relevant CPD.

At present, the IDD is due to come into force in October 2018, after the European Commission proposed a seven-month delay to the original start date of February this year.

Chapters Financial director Keith Churchouse says he was only made aware of the changes through his compliance consultant, and has not seen any protection provider or industry figures discussing the changes.

He says: “We get a lot of feedback from the protection industry that advisers don’t use them enough, but here’s a good opportunity for them to help advisers in giving them CPD material, and they don’t seem to have grasped that.”

Churchouse has already conducted five hours of relevant CPD and encourages others to get ahead with their requirements.

He says: “I’m pleased to have made a start. You don’t want to get to the end of the CPD year and find out this will be enforced, so why take the risk? If you are a financial planner providing holistic advice, reading around protection for 15 hours won’t do you any harm.”

First Wealth partner Claire Phillips says that networks, which often monitor adviser CPD, have also missed an opportunity to brief their adviser members on new rules that could add to the protection gap if advisers do not understand them.

She says: “I guess everyone has just missed it, but it seems unlike providers to miss an opportunity, they are always knocking on doors to get in front of advisers. I would struggle to see how we would cover 15 hours of straight protection unless we did an exam every year…perhaps we do need packages.

“Fifteen hours sounds like a lot for protection, versus something more complicated like drawdown, where there are no specific or prescriptive requirements.”

Protection Review chief executive Kevin Carr notes that, although advisers attending conferences should pick up plenty of protection CPD hours, providers will likely create more specific offerings in due course.

He says: “It should be relatively easy to do 15 hours in a year, but whether there is much at the moment that is easily available I’m really not sure…they will be planning it but it hasn’t happened yet.”

Underwrite Me head of sales Phil Jeynes hopes more specific CPD will give advisers more confidence to sell protection in greater volumes. He explains: “Most insurers would say they have lots of content on their website that IFAs can access and use towards CPD, but it’s a reasonable challenge to ask why they have not put specific IDD packs together for advisers.

“Our whole thing is trying to make protection easy to sell, so if you are encouraging them to do the CPD, as an integral part of what they do regularly, they will become more expert…It could give them confidence that the process is easy and to get out to consumers with the products.”

A Zurich spokeswoman says: “If the extra CPD requirement improves the quality of advice, it can only be a positive move for the industry. We’re involved in regular CPD events with various partners and will continue to offer this with a focus on protection.”

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