Broker trade body says banks should focus on their own business

Eric Galbraith

Biba chief executive Eric Galbraith has called on the FSA to ban banks from selling general insurance products.

Galbraith’s strongly worded comments come in response to FSA managing director Martin Wheatley’s speech on Wednesday, in which he outlined plans to stamp out mis-selling in financial services created by sales incentives.

Galbraith said: “The FSA’s announcement is a step towards recognising the role that banks have played in the mis-selling of financial products, however the FSA could explore the merits of adopting a similar approach to Canada where banks are prevented from directly selling general insurance products altogether. 

“Our sector has been tarnished by the practises of other institutions, whose main business is not insurance and have mis-sold insurance products. Banks and other organisations should focus on their core business and not be allowed to directly sell general insurance.

“I agree with Mr Wheatley that ‘all of us need a strong, profitable financial services industry that can give us the advice we need to guide us’ however, this will not be achieved on general insurance unless the regulator recognises that advice is the area of the professional insurance broker and intermediary whose business is insurance and not a bank or other organisation whose main business is not insurance.”