"Consumer duty basically requires us to go to greater effort to ensure that our customers understand our products and services. So where the decision is non standard, it's important that you explain the rationale for that non standard decision," he added.
Equally, when setting up a policy deemed better for the client, such as two individuals having individual rather than joint policies, it will be paramount to document the rationale for that.
Ongoing advice
Under the consumer duty, advisers and providers will have to ensure they work together to provide an ongoing service to the client, Timpson said.
This will involve providers notifying the advisers if payments have been missed or policies terminated or changed.
Given the current squeeze on household incomes, this could be a more prominent issue in the months to come, he suggested.
“If a consumer directly makes a request to either cancel a policy, or change the policy, so reducing the amount of the amount of cover, that basically is a trigger, an indication of a potential vulnerability.
“At that point, not only should the life office be instituting the vulnerable customer protocols, but the intermediary should be as well. Someone needs to contact the client to find out why.”
He added: “Some providers are very good, and they will do that. But others will probably leave or wait until maybe two or three premiums have been missed, or they may not yet actually advise the adviser at all.
“And if that's the case, we have the risk of the consumer losing the benefit of cover. And the adviser being unaware that that consumer may well be potentially vulnerable.”
Overall, insurers and advisers should do more to keep consumers regularly advised about the policies they have and why they have them, what they can do to alter them, or claim on them, Timpson said.
Things like annual benefits statements should become the norm, he said, particularly given the requirements of the consumer duty to ensure that customers understand the product, its features and what they can do with it, throughout the product’s lifetime.
Wherever the adviser can’t help the client, they should be signposting them to those that can, as well as support services.
“Support services are a feature now of every provider's proposition, but they are under-used.
“Given the focus on better supporting vulnerable customers, and the higher standards required by the consumer duty, we have to do far more to make sure that consumers are made aware and kept aware of the support services available to them, because they are paying for them.”
