PPI industry set for massive upheaval, says Defaqto

February 22, 2008 | posted by Luci Mylward in Insight, Insurance, Press Release | comments (0) |

Defaqto’s latest report, “Payment Protection Insurance - 2008  - The party’s over ” predicts that over the next two years there will be a  massive upheaval in the industry as lenders, underwriters and consumers are forced to adjust to consequences that will flow from the judgements of the Competition Commission.With an annual turnover of around £4.5bn and profits in the order of £1.5bn the industry is likely to suffer a severe dilution of profits when the Competition Commission’s statement of remedies is published. If this includes de-coupling the sale of PPI from that of the credit product, this in itself would have a huge impact on the industry. 

As a consequence of the inevitable tightening of the rules under which PPI can be sold, costs and charges across a wide range of other financial products and services will have to rise steeply if banks and credit card companies are to fill the holes in their balance sheets that this will create.

PPI products principally cover protection for loans, credit cards and mortgages but there are significant differences in the way the products are costed and sold. So, while the shortcomings of the PPI industry are well-documented, particularly in connection with the complexity of the products, the sale process itself, the sale to people not covered by the policy and the high cost of some plans, these findings do not apply universally.

PPI policies can and do provide a vital income stream to meet ongoing bills if accident, sickness or unemployment does strike and calls by newspapers and lobby groups to policyholders to cancel their policies could leave them seriously exposed if this advice were followed.

Commenting on the industry, Brian Brown, Head of Insight and lead author of the report said: “We must be very careful not to throw the baby out with the bathwater. PPI has been exploited by lenders as an easy source of profit, but the products themselves can be an extremely valuable.

Policyholders need to carefully examine their personal circumstances and their policy wordings and form a judgement as to whether to retain them, seek cheaper alternatives or drop them altogether.

PPI is the first safety net people fall back on before being forced to claim state benefits and PPI’s detractors should think carefully before advising people to cancel their policies unless they are prepared to accept responsibility for policyholders left unprotected by their advice.”

-Ends-

Notes to Editors:

1The report “Payment Protection Insurance - 2008  - The party’s over ” is on sale priced £1,200 excluding VAT for a PDF version and £595 (No VAT payable) for a single printed copy. For further information please contact Chris Johnston on 01844 295457, or the Sales Department on Freephone 0808 1000 804 or visit http://www.defaqto.com/

 For further information contact:

Defaqto Limited 

Brian Brown, Chris Johnston or Luci Mylward

01844 295 454

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Be my Valentine!

February 14, 2008 | posted by Ben Heffer in Service | comments (0) |

St Valentine’s Day sees the publication of Defaqto’s third Investment Service Report and, at a time when many are focused on their personal relationships, perhaps it is timely to review the relationship IFAs have with their chosen business partners.

We choose and stay with our life partners because on balance we get on together. We may not be well matched in all areas of our life, in fact some things our partners do may annoy the hell out of us, but on the whole there is sufficient compatibility to ensure a mutually beneficial relationship.

The situation is not disimilar for IFAs and their preferred investment bond providers. In Defaqto’s study, Skandia, Standard Life and Zurich Assurance were voted the most popular providers of onshore bonds and on the whole these providers are performing well from a service satisfaction viewpoint. Interestingly, though, they don’t get top scores for all the service disciplines examined in the study. Some providers, for example, AXA, Prudential and AIG Life score very poorly indeed.

Most would agree that lasting relationships are built on mutal respect and commitment from both parties rather than the occasional grand gesture, such as heart-shape balloons and flowers on St Valentine’s Day. Just like personal relationships, IFAs will put up with with a certain amount from their preferred providers, but in the end if things don’t improve, they may be forced to bail out and seek romance elsewhere!

The report is available to download free from www.defaqto.com/report

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Free Defaqto report shows how IFAs rate investment providers for service

February 14, 2008 | posted by Luci Mylward in Insight, Investment, Press Release, Service | comments (0) |

A new report  Investment Service 20081 is the third annual investment study from Defaqto into how IFAs rate provider service levels.The report is downloadable free of charge at: http://defaqto.com/report

Based on research among 500 IFAs2, it identifies what IFAs consider the most important service functions from the 32 examined, how well each provider performed when the service functions were grouped into nine benchmark categories and which companies were the top three preferred providers in each main type of investment contract.

Also the report  measures how well the industry as a whole is meeting adviser expectations across the nine categories. The findings indicate that in some important service categories the industry is falling short of expectations.

Another important section of the report includes a Defaqto critique of the service levels of the eighteen  providers profiled, often comparing their situation with how they performed last year.

Ben Heffer,  Principal Consultant - Service  and author of the report said: “The report addresses the difficult area of quantifying IFA levels of satisfaction with investment product providers, but because of the large number of respondents and the depth of the research, we are very confident in the findings.”

Providers wishing to understand in detail exactly how their individual service levels are regarded by IFAs and how these compare with the industry average, can purchase a further bespoke report derived from the very substantial market research study that is the basis of this report.

                                                                                     -Ends

Notes to Editors

1 The Investment Service 2008 is available free of charge from: http://defaqto.com/report  For further information, please contact Ben Heffer on 01844 295447.

2Fieldwork was undertaken by W A Taylor and Associates during December 2007 with 500 randomly-selected IFAs by one to one telephone interviews

For further information contact:

Defaqto Limited
Ben Heffer, Chris Johnston or Luci Mylward
01844 295 454

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Carbon offsetting is good PR

January 7, 2008 | posted by Ben Heffer in Insight | comments (0) |

It seems that everyone is obsessed with their ‘carbon footprint’.

Even my cousin, whose regular Christmas circular letters have delighted the wider family with the minutiae of domestic life for many years now, this year declared that she wishes to reduce her carbon footprint and encourages us to supply our email addresses in time for next year’s edition.

Since Kyoto in December 1997, governments, corporate bodies and individuals have been increasingly focused on how to reduce their contribution to global warning. Financial services companies are no exception with environmental responsibility now a key plank of their general corporate responsibility charm offensive.

Financial services groups are keen to promote themselves as trustworthy and caring and no better way to do this is to demonstrate corporate responsibility by being a good employer, supporting community projects and educational projects, espousing equal opportunities, and now reducing their impact on the environment. (more…)

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FREE Defaqto report shows how IFAs rate Protection Providers for service

December 4, 2007 | posted by Chris Johnston in Insight, Press Release, Protection, Service | comments (0) |

 A new report “Protection Service 20071 “ is the second annual protection study from Defaqto into how IFAs rate provider service levels. The report is downloadable free of charge from: www.defaqto.com/report 

Based on research among 500 IFAs2, it identifies what IFAs consider the most important service functions from the 39 examined, how well each provider performed when the service functions were grouped into nine benchmark categories and which companies were the top three preferred providers in each main type of protection contract.  

The report also measures how well the industry as a whole is meeting adviser expectations across the nine categories. The findings indicate that in some important service categories the industry is failing short of expectations. 

Another important section of the report includes a Defaqto critique of the service levels of the thirteen providers profiled, often comparing their situation with how they performed last year. 

Ben Heffer, Principal Consultant - Service and author of the report said: “The report addresses the difficult area of quantifying IFA levels of satisfaction with protection product providers, but because of the large number of respondents and the depth of the research, we are very confident in the findings.” 

Providers wishing to understand in detail exactly how their individual service levels are regarded by IFAs and how these compare with the industry average, can purchase a further bespoke report derived from the very substantial market research study that is the basis of this report. 

-Ends       

Notes to Editors
1 The “Protection Service 2007” is available free of charge from: www.defaqto.com/report  For further information, please contact Ben Heffer on 01844 295447. 
2 Fieldwork was undertaken by W A Taylor & Associates during August 2007 with 500 randomly-selected IFAs by one to one telephone interviews   

For further information contact:
Defaqto Limited
Ben Heffer, Chris Johnston or Luci Mylward 01844 295 454   

 

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