The Financial Conduct Authority's increasing attention towards the insurance profession could be a sign there is an 'overly strong focus' on commission, Ian McKenna has warned.
Speaking at the ProtectionGuru Awards ceremony at the Sheraton Grand in Park Lane, London, on October 18, the founder of ProtectionGuru said he welcomed more regulation in the protection industry, but warned against price regulation.
He said: "Nearly two generations into financial regulation in this country, the regulator is starting to turn its attention to the protection industry.
"That wonderful bunch of people in Stratford - no I don't mean West Ham.
"While this is welcome, and I would say it is overdue, it is hard not to read the terms of reference to feel the regulator is overly focused on commission.
"Like so many people in our market, I find the review helpful but I hope it does not end up being an exercise in commission analysis."
He used his keynote speech to remind the FCA that the UK has the fourth largest protection market in the world by premium income, a third larger than the French market and twice the size of the South Korean market.
"This is something we should be proud of as a country but if the FCA gets it wrong, it could be devastating."
The focus on commission analysis in the protection industry is something that FT Adviser has been warning about for a few years.
He also hailed the rise in income protection being written across the market in the past few months, an objective of the insurance profession for quite some years, and now "becoming a reality".
Moreover, in line with Consumer Duty, more advisers and wealth managers have been taking more time to discuss protection needs with clients, a development that McKenna said was "extremely positive".
simoney.kyriakou@ft.com
