New research from protection specialist LV= reveals that over a quarter (28%) of mortgage advisers are unaware that from 6 April 2012 they are not allowed to sell accident, sickness and unemployment style insurance products including PPI and MPPI at the point of sale of a mortgage.
The sales ban is part of the Competition Commission's PPI order which outlines how PPI can be marketed to customers; how a PPI quote must be laid out; and makes it mandatory for customers to receive an annual review setting out the cost of PPI.
The research, carried out by LV= amongst advisers at a mortgage broker expo, reveals that while 72% know the ruling is coming into place, 52% are not fully aware of what the new rules mean.
Overall, three-quarters of mortgage advisers (71%) feel that there is not enough guidance given on how the new changes should be implemented.
However, it is clear that many mortgage advisers are getting to grips with what the ruling will mean for their business, as one in five (21%) say that they have already reviewed their processes to ensure they are compliant; and a third (31%) say that they have allocated time and resources to preparing for the changes.
Mark Jones, LV= Head of Protection 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."
LV='s Mortgage and Lifestyle Protection
(MLP) product offers long-term protection against the loss of income through illness or accident, and also provides unemployment cover. MLP is not covered under the Competition Commission's ban, so can be sold at the point of sale with a mortgage. MLP was designed to offer mortgage advisers’ a high quality long-term protection product with a simplified sales process as an alternative to MPPI.
For further details on the LV= range of protection products, including Mortgage and Lifestyle Protection go to www.LV.com/adviser