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Protection advisers say loaded premiums could be next mis-selling ‘scandal’
Protection advisers have criticised the use of loaded premiums and said it could become a “future mis-selling scandal” and destroy trust in the industry.
Simple Fast Mortgage principal, Rob Peters explained at the moment, two identical customers could pay different prices for the same cover, purely because one includes a loaded premium for more commission.
“It’s hard to justify that ethically — or in the eyes of the regulator,” Peters said.
A similar sentiment was shared by New Leaf Distribution CEO, Daniel Hobbs, who suggested consumer duty “simply isn’t working” in the protection market as long as the practice is allowed to continue.
“It’s ridiculous that just because a client goes to a certain broker they could end up paying 10-15 per cent more per month,” he said.
“Over the course of a product life that could be thousands of pounds more than a true whole of market adviser.”
Hobbs therefore called on the Financial Conduct Authority to “review and level the playing field” as soon as possible.
