Advisers who inspire trust and confidence should make the most of clients’ protection needs, argues Phil Whitehouse, head of The Mortgage Alliance (TMA)
In any walk of life confidence can be a fragile thing. I’ve been taking a great interest in the Ashes series especially as it has just passed through my neck of the woods at Edgbaston where I was fortunate enough to attend even though it was on the first of the rain affected days.
Cricket is certainly a confidence sport. This can easily be illustrated by a batsman in full flow or a bowler having picked up a couple of wickets. As we saw in the last home Ashes series this increased confidence can have a knock on effect to the whole nation by creating a wave of the ‘feel good factor’ that great sporting performances can illicit. Confidence can help create greater trust and belief. However, in our day to day lives it is often the case that we need this confidence to be built up over a period of time before we can let this turn into trust. This is in sharp contrast to the emotive aspect of sport when it can only take seconds for us to get carried away and believe we are watching world beaters only for the rug to be pulled away in a flash. As a West Bromwich Albion supporter, I know this feeling all too well!
Trust and confidence can indeed be fickle creatures but to an adviser they are integral components in any business model. Trust can work in a number of ways. Of course clients must trust their adviser and place confidence in their expertise and knowledge. This trust/confidence will obviously guarantee a strong relationship and potential future referrals/retentions. In contrast a lack of trust in the state could also conversely result in clients seeking greater help/reassurance/advice in areas of the market such as protection
The protection market has had its fair share of knocks and indeed falls in confidence over recent years but a recent survey of members of the Personal Finance Society, in conjunction with Protection Review and Fineos, highlights a renewed focus on protection amongst financial advisers, with 63% of members believing that the importance of personal insurance has increased as a result of the current economic turmoil.
Interestingly over 70% of respondents agreed or strongly agreed that their clients have less trust that the state will provide for them in these times of economic turmoil. It has been well documented that brokers must diversify in order to open up new revenue streams and the protection sector is certainly one that should continued to be investigated. This lack of state confidence is an area that advisers can really utilise for their benefit. Having government benefit leaflets and stats to hand during a client meeting can help dispel any lingering myths that the government will look after them if they are in need.
People’s sense of health and mortality inevitably becomes sharper if surrounded by financial turmoil. When compounded by a lack of state confidence increasing numbers of individuals are realising that in order to protect loved ones they are having to take greater responsibility rather than such measures being left in the hands of the state. This is where good advisers can really help with protection and life requirements to ensure that control is put firmly back into the hands of the client.
The protection sector is one that can prove to be simpler for the intermediary to advise upon and provide effective solutions for the client than it first appears. A combination of expertise and strong relations can make this a sector which opens up extra, valuable revenue streams for intermediaries and help build the additional confidence required by clients at a time when trust and confidence are priceless commodities.