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28% of brokers ignorant of POS ban for protection products

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  • 12/03/2012
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28% of brokers ignorant of POS ban for protection products
More than a quarter of mortgage advisers are unaware that from 6 April 2012 they will not be allowed to sell accident, sickness and unemployment (ASU) style insurance products, including PPI and MPPI, at the point of sale of a mortgage, according to LV=.

The sales ban is part of the Competition Commission’s PPI order that outlines how PPI can be marketed to customers and how a PPI quote must be laid out. It also makes mandatory for customers to receive an annual review setting out the cost of PPI.

Research carried out by LV= among advisers revealed that, while 72% know the ruling is coming into place, 52% are not fully aware of what the rules mean.

Overall, 70% of advisers felt that there is not enough guidance given on how the new changes should be implemented.

However, LV=’s research showed that one in five advisers have already reviewed their processes to ensure they are compliant and a third have allocated time and resources to preparing for the changes.

Mark Jones, head of protection at LV=, said: “The implementation date for these changes is now less than a month away and will have a significant impact on the way protection products can be discussed when people are buying a mortgage.

“It’s worrying that many mortgage advisers aren’t aware of what they need to review ahead of this ruling coming into force, or even that new rules will apply. Many advisers will now be looking at products to sell as an alternative to MPPI, and we hope they use this opportunity to discuss longer-term income protection products with their clients.”

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