To say that having a strong protection proposition, or an arrangement where you refer to those that do, is more important than ever is clearly a major understatement. In a Consumer Duty environment it is a non-negotiable for advisers, and yet still we find so many advisers/firms who have nothing in place, or are not confident with what they do have and are therefore missing a crucial opportunity. To aid advisers in this, below are some helpful tips and thoughts that should allow you to maximise your protection penetration.
What do you know about protection?
Be honest with yourself. Are you completely on top of the protection market and what it can offer clients? Do you have slight prejudices about client’s protection needs? Do you naturally assume from the outset that different clients will want protection, and others won’t? You need to put these to the side.
Also, when it comes to protection, don’t be ageist. Don’t blindly assume that younger clients won’t want protection cover. The key point to remember here is that protection is significantly cheaper the younger the client is. Unfortunately, at a younger age clients can feel invincible however this is undoubtedly the best time to put cover in place because it’s never going to be a better time for them to get it.
You have to ask the question; what cover the client has, and what are the gaps that need filling.
As usual with advice, if you don’t ask, you don’t get the information you need to be able to make a difference. I’m constantly surprised by the gap between those advisers/firms who offer protection and those who don’t, despite the fact they are often handling significant volumes of mortgage advice.
You must ask the question: do you have any existing protection and ask for the details of the existing cover. This enables you to, very easily, (through repetition), identify the gaps in their cover. This is very important especially as so many clients’ circumstances will have changed since the last time you saw them, or the last time they took out a mortgage, plus at that point they might also be changing the amount they are borrowing and/or borrowing over a longer term. Again, this shifts the protection requirement.
At this stage, you’re not even really selling protection; you are merely pointing out the shortfalls and making new recommendations.
Don’t prejudge the client or the cover they might want and need, and how they view its cost.
It’s really important as advisers covering protection to put any feelings we might have about its value to one side, as is our understanding of where it should sit as a priority for clients, and the amount they are willing to pay for cover.
For example, you might think that a Doctor client – who perhaps deals with critical illness amongst their patients on a daily basis – would be prepared to pay a considerable amount for this protection, knowing the full extent of what the impact of such a diagnosis can have on a family and their finances.
And yet I’ve had Doctor clients who have given me a budget of £30 per month when it comes to providing them with CI cover. On the flip side, you’ll have a client who has felt the personal effect of a critical illness diagnosis amongst their family or friends, who has no issue whatsoever in paying over £100 per month for comprehensive CI cover.
Clients can’t be prejudged, which is why it’s always best to quote upfront on what they should have in an ‘ideal world’ and see how they react to this, and its cost. You might be surprised at what is acceptable to them, and if it’s not, then you can work with them to find cover/cost that is.
The habit of quoting
You’ll never make that protection recommendation or sale if you don’t provide the quote. Take time to understand your clients, ask general questions about their health so you don’t end up spending time discussing critical illness/life cover, for example, only to find they have an illness that prevents them from qualifying. But, certainly go through that process and deliver that quote.
If it’s not for you, speak to a specialist
As a starter, speak to people who are good at it. I don’t wish to blow my own trumpet but I’ve been brought on as a Protection Developer within The Right Mortgage because I do this day-in, day-out and I can help our AR firms and advisers follow a similar path.
If it is something you want to get better at, and immerse yourself in, then speak to others. Provider BDMs can offer help and support, plus accessible tools, like CI Expert, the Protection Guru, and Underwrite Me. They can be invaluable in convincing a client that one provider is better than another.
However, if protection is not something you feel you can address properly, then don’t see it as a weakness to refer clients to protection experts. I love doing protection; I don’t love doing mortgages, so if you feel the opposite then it’s about utilising your time and expertise in the best way possible, and refer instead.
We had an adviser who would skip protection every single time, refer the client on, and move onto the next mortgage straight away – by doing so she tripled her income from protection and doesn’t have to do any of the work. The client gets the right outcome and you earn from it. What’s not to like. If you’re not doing it or don’t want to do it, far better that your client has access to specialist protection advice than nothing at all.
Phil Davies is protection developer at The Right Mortgage and Protection Network