Another Day, Another Stick: The Protection Product Dilemma

It seems the powers that be have found yet another stick to beat advisers with, and this time, it's wrapped up in the shiny packaging of "consumer duty." Yes, you read that right—failing to recommend a protection product could now mean you're in breach of consumer duty regulations. The message from the top brass, like Tony Mudd at St. James's Place, is clear: if you’re not pushing protection, you’re putting your neck on the line.

Let’s unpack this, shall we? Apparently, the Financial Conduct Authority (FCA) isn’t just content with advisers navigating the minefield of financial products and regulations. No, now they want you to predict the future as well. “Avoiding foreseeable harm,” they call it, which in plain English means: make sure your client is covered for every possible calamity, or face the consequences.

Now, I’m all for clients getting the right advice—after all, that’s what the job is about. But this? This is something else entirely. We're now in a world where if you don’t suggest a protection product—because, heaven forbid, the client might not want it—you could be accused of dereliction of duty. It’s not enough to offer sound financial advice; now you need to be a mind reader, fortune teller, and insurance salesman rolled into one.

Imagine it: you’re sitting with a client who’s got significant debt, a family to support, or maybe they're renting and don’t have much tucked away for a rainy day. All perfectly reasonable grounds to suggest some protection, right? But what if they say no? What if they’re simply not interested in spending money on something they don’t believe they’ll ever need? Do you push harder? Do you warn them that, by refusing, they’re basically daring fate to strike?

It’s a no-win situation. If you don’t offer the protection, you're potentially liable for not avoiding “foreseeable harm.” If you do and they reject it, who’s at fault then? The adviser, for not being persuasive enough? The client, for being too stubborn to see sense? Or the regulator, for creating a scenario where advisers are perpetually damned if they do and damned if they don’t?

And let’s not kid ourselves—this isn’t about “doing the right thing” as much as it’s about covering backsides. The providers, commentators, and managers are all too happy to lay the responsibility squarely on the advisers’ shoulders. Why? Because it’s easier to make advisers the scapegoat than to admit that sometimes, just sometimes, clients don’t want what you’re selling.

So here we are, with legal obligations looming like a dark cloud over every client meeting, turning advisers into walking liability magnets. One misstep, one failure to push protection hard enough, and you’re staring down the barrel of potential legal action. It’s the kind of pressure that follows you to the grave—or worse, to your client’s grave.

Who, in their right mind, would want to stick their neck out under these conditions? It’s no wonder advisers are wary of the increasingly labyrinthine regulations that seem designed more to catch them out than to genuinely protect the consumer. The reality is, we’re all just trying to do our jobs—helping clients navigate their financial lives without getting tripped up by every new rule or regulation that comes our way.

So, the next time someone like Tony Mudd suggests that not recommending a protection product could land you in hot water, maybe it’s worth asking: who really benefits from this? The clients? The advisers? The bosses? Or is it just another cog in the regulatory machine, ever ready to grind us down?