The Consumer Duty has revitalised interest in protection among financial advisers across the UK. Key findings from AMI’s 2024 Protection Viewpoint Report highlight significant changes in consumer and adviser behaviours.
- 41% of advisers note improved consumer outcomes due to Consumer Duty, with more protection discussions taking place.
- A notable increase in the range of protection products discussed by advisers, up to 31% from last year.
- Consumer demand for protection advice grew, with 21% of mortgage customers initiating discussions, highlighting a shift in client engagement.
- Gen Z’s focus on income protection showcases a generational shift in attitude towards financial security.
The Consumer Duty initiative is significantly influencing the landscape of financial advice, as evinced by findings from the 2024 Protection Viewpoint Report by the Association of Mortgage Intermediaries (AMI). The report underscores a renewed focus on protection as 41% of financial advisers acknowledge the improvement in client outcomes. This regulatory shift has prompted advisers to enhance the quality of their consultations, resulting in an increased frequency of protection-related conversations.
In an encouraging development, 31% of advisers are now covering a broader spectrum of protection products, marking an increase from 24% in the previous year. This indicates a concerted effort by advisers to adapt to the evolving expectations of consumers, ensuring that a diverse range of needs are adequately addressed. Furthermore, there is a growing awareness among mortgage customers regarding the importance of protection services, with 21% proactively engaging their advisers on these matters, a significant jump from 11% last year.
The report also reveals a pronounced interest in protection among younger generations, particularly Gen Z, with 65% valuing income protection, contrasted with 48% of Gen X. This generational pivot is also reflected in the uptake of protection policies, underscoring a broader cultural shift towards prioritising financial security from an early stage.
Robert Sinclair, Chief Executive of AMI, highlights the focus on tailoring protection to individual needs and objectives, stating the report offers ‘actionable ideas’ to overcome industry barriers. His remarks elucidate the importance of custom-fit financial advice, resonating with the industry’s commitment to elevate service standards under the Consumer Duty framework.
The research also notes that 29% of policyholders sought professional advice when acquiring protection, a process that involved face-to-face consultations for 34% and even 56% among older generations. This underscores the ongoing relevance of personalised interactions in financial planning, particularly for complex decisions.
The AMI’s findings reinforce the transformative impact of Consumer Duty on both advisers and consumers, heralding a new era of engagement and protection focus.
