I considered whether I should do as Roisin has done and not reply to this post but I feel in warrants a reply.
I think you are being very unfair Brendan. How did you come to the conclusion that 'most people don't trust brokers? What study exactly did this come from? Or is this simply supposition based on your own feelings and experiences?
In the days of the Celtic Tiger approximately 50% of PTSB's mortgage business was done through brokers. Brokers sold far more tracker rates than banks directly as PTSB's figures would confirm. They also sold dramatically less payment protection plans than the same banks. So the evidence might suggest that time and time again brokers are more likely to conduct business in good faith and in the best interests of their clients and not the institution.
Also about 50% of Aviva Health's business is placed through brokers, from individuals to large domestic and multinational companies. These two examples would clearly suggest that someone must trust brokers! But let’s not deal in supposition, let’s put some actual accountability behind our claims.
A financial services research study done in the UK only a year ago showed that while trust was down across the whole of the financial services industry, brokers remained the most trusted with Building Societies in second place. While this is a UK study it is a reasonable indicator of sentiment.
Also of the 7,230 complaints made to the Financial Ombudsman in 2010 only 447 were made about intermediaries some of whom may not be brokers.
Also with regard to the idea of paying for advice on health insurance, each of the three insurers will be able to provide a level of cover suitable for 90% of people’s needs.
On occasion you will get instances where there may be specific requirements of the client that will indicate that another insurer is more suitable, based on how they treat certain procedures or scans that may be of extra importance to, or used more frequently by the client such as mammograms, IVF, Dexa scans, arthoplasty, cataract extraction, Tavi’s etc. Indeed even in these circumstances the premium differential of the plans might be great enough to suggest that the client self insure the risk for it, if and when the need arises. If not, the broker in most cases may be happy to absorb the fact that they will not get paid for the advice the other 10% of the time, (most brokers will consider their professional credibility is worth that!).
So what does that tell you? It tells you that a good broker can offer you the following:
Detailed Fact Find: Analysis of your individual needs and expectations.
Comparison Report: Detailing where there is a difference in existing cover and any proposed solution.
Statement of Suitability: Letter detailing why the product suggested is suitable for your needs and detailing the collective understanding by both parties engaged in the transaction so as to ensure both parties are satisfied as to the suitability of the offering.
This is a service you will not get directly with an insurer and one which you should be delighted to have offered to you for free but one which you should be prepared to pay for!
More to the point however, and a point you seem to have missed is that ‘trust has nothing to do with it’. One’s decision whether or not you use a broker should not primarily be decided on an issue of trust, but on two things, competence and accountability.
Competence: Is the broker highly active in this market, up to speed with market changes and do they possess the product knowledge to advice on all available plans.
Accountability: Being regulated and having the onerous responsibility laid out in the consumer protection code you have the right of recourse should you have been ill advised. (You don’t even enjoy that level of legal protection with VHI directly due to the fact that they remain unregulated for the provision of health insurance.)
That is the point! You share the risk when you use a regulated trained professional rather than taking advice from the “How to save money on your Health Insurance” slot on your favourite radio station! Make the wrong choice there and you’re on your own and rightly so.
I understand your point on paying a fee in order to be sure that ‘Caesar’s wife must be above suspicion’ and for that reason I do charge a fee, but how have you come to the conclusion that a broker should refund commission earned from an agreement between them and an insurer? This agreement where it exists is long standing and between an insurer and intermediary. It bears no affect on the cost of the cover provided. The days of people falling over each other for mortgage business and throwing commission at clients are over and thankfully so. You can’t have it both ways. I will charge you a fee Brendan for good comprehensive advice but in your case will keep the commission earned if best advice (for which you pay me) dictates that you end up with a provider who sees fit to remunerate me for introducing the business. I like other professionals study to be proficient in the advice I give and will charge accordingly for that advice.
This sort of baseless comment is insulting to both brokers and the hundreds of thousands of people who see fit to use their services on a daily basis, people who no doubt represent a cross-section of ask about money users.
In the business of financial services one can expect to hear this sort of thing from time to time but to hear this notion endorsed by the owner and moderator of this site and from someone who describes themselves as a consumer activist is disappointing to say the least.
I won’t responding to any further posts on this issue.
Patrick
