MorganAsh comments on FCA's pure protection market review

21 March 2025

Andrew Gething, managing director of MorganAsh, said:

“The FCA’s market review looks set to address many of the known harms the sector has been aware of for a long time.

“As expected, commission remains a hot topic – as we have seen in the car finance sector. Consumer groups have long cited commission bias as a cause of consumer harm. While the industry argument that the protection gap would widen without commission does have merit – particularly for less exciting products like life insurance – it’s up to firms to evidence in their outcome reporting that any detrimental impact of commission bias is minimal and/or reducing, especially for vulnerable cohorts.

“The sector is responsible for many good outcomes and the FCA recognises this in its updated terms of reference. However, these products are most needed when clients are at their most vulnerable. With the FCA’s recent vulnerability review identifying that many firms are still unable to monitor or take action on outcomes for this cohort, the sector needs to demonstrate that is looking beyond just those who claim and is alive to the challenge for all customers.

“Across all areas - particularly customer vulnerability management – robust data is absolutely critical and the best defence in meeting the regulator’s requirements – particularly Consumer Duty. With quality management information, firms will hopefully be able to demonstrate that any poor outcomes that are identified in the review are at least low or shrinking.”