Will protection be the new pet project?

With the Retail Distribution Review in place, protection business will comprise a greater part of firms' propositions and will receive further regulatory scrutiny, predicts Roderic Rennison. He considers the evidence for a likely protection review and actions firms should be thinking about now.

Roderic Rennison (roderic@rennisonconsulting.com) is a director of his own consultancy, Rennison Consulting Ltd (www.rennisonconsulting.com), as well as The Ideas Lab Ltd, and focuses on change within the retail financial services market.

The RDR, which became operative on 31 December 2012, will have profound effects on the UK market for retail investments. The Financial Services Authority's stated objective is to restore consumer confidence and trust by improving professional standards of advisers and the quality of their advice. While the FSA considered the read-across to pure protection (in consultation paper CP09/31), it concluded that the identified causes of consumer detriment in investment did not apply and that the risks could be addressed in other ways.