To bring our In Focus campaign across IFA Magazine’s New Insurance and Protection to a close, Roy McLoughlin, Board Member of the Protection Distributors Group, explores how ongoing regulatory reform and the increasing use of technology could work together to ensure protection plays a more central role in supporting younger clients and their financial futures.
Retail financial services regulation is undergoing the biggest shake-up since the Retail Distribution Review. But is protection in danger of being left out of the conversation?
In the past few weeks, we have seen the first approvals allowing financial services firms to offer targeted support.
Earlier this year, the FCA began consulting on regulatory changes to offer firms more clarity with regard to simplified advice.
More recently, the regulator also hailed the fact that nearly third of adviser firms are considering offering simplified advice, according to the FCA’s own research and report on the adviser market.
In fact, the FCA sounds ambitious in terms of what regulation can achieve.
To quote the report: “We want to see a competitive, innovative and resilient financial advice market that supports sustainable growth alongside newer regulatory offerings such as targeted support and more simplified forms of advice to meet consumers’ needs.”
But what about protection?
Of course, much of the focus for policymakers has been on getting people investing – especially given the large numbers of people holding very large cash balances.
Government and regulators also want to see more people making the right pension decisions, whether that is contributing enough or having a better strategy for taking income.
Yet the Protection Distributors Group believe that protection needs to be part of that conversation for both long-established and for some new reasons, one being that younger people are buying houses later, delaying one traditional trigger point for taking out protection.
We also need to engage with the regulator, and we actually have an amazing opportunity to do so, because the Pure Protection Market Study interim report saw the FCA asking for ideas to close the protection gap. The FCA also noted a suggestion from many in the protection sector that targeted support should be extended to protection. Advisers back that approach as well.
In our recent survey, the Protection Insights Report 2026, we found that 69% of advisers who expressed a view, were in favour of the extension of targeted support to protection.
The report also showed that in communication terms, close to 50% advisers are either embracing or exploring using AI across a wide range of areas, such as client and website communications and social media.
Yet we need to get those comms right.
We would also point to another brilliant report, the Critical Thinking report 2026 from CI Expert, which did, unfortunately, reveal some important consumer misunderstandings about Critical Illness and Income Protection, including a perception that CIC was attached to the mortgage. IP saw several misunderstandings, including its relationship with sick pay and a view that mental health was not a common reason for payouts. One intriguing finding is that younger respondents were more favourable to enhanced cover when it was explained.
These represent a lot of threads to pull together, but we do think it is possible. We have an increasingly clear picture of where advisers and clients are. We need to devise new strategies to reach more people and overcome their objections involving technology, smart comms and a willingness to try new approaches.
But regulation can help as well. Protection is an important part of a holistic financial plan. It also gives younger people an important underpinning upon which they can then build wealth. We want to see it included in all distribution reforms to maximise the number of people protecting their health, wealth and income and establishing good financial habits for the rest of their lives.
