There’s always a considerable amount of talk in the adviser market about product diversification, adding more strings to your bow, developing income streams that can run alongside your main mortgage one.
However, as above will tell you, these tend to be regarded, and referred to, as ‘additional income’ – that is offering these products and services to clients who are going through the purchase/remortgage process with you, if time allows and if advisers make it a part of their advisory process. And of course that’s an excellent way to develop your business offering and, from my perspective, makes absolutely perfect sense. Why allow a client to go elsewhere for products and services which you could (and perhaps should) be offering?
These ‘additional products/services’ tend to be, GI, conveyancing, legal services, etc, and for some brokers even protection is relegated to this ‘additional’ category. Offering a raft of relevant, associated products makes sense because at the mortgage point of sale, advisers can review their clients’ other needs in these spaces.
But, what about those individuals who are not going through the mortgage process? Do they not have a need say for protection or GI? Of course they do, and if we are talking about broadening your consumer proposition as well as a potential income-driver for advisers then should we perhaps be reviewing our marketing/lead generation for those individuals without the mortgage need?
A recent article in the Daily Mail set this thought in my head. It was called ‘Is critical illness and income protection worth paying for?’ and was written by the journalist, Georgie Frost, about her own experience in her mid-20s when she had a back injury which left her unable to work for a year. Because she was a freelancer at the time this had a clear and measurable impact with the benefits she could claim not enough to see her through this time, and with no protection policy in place to fall back on. She was left relying on her credit cards to fund her over this time.
Now, of course, many younger people might read this and think, ‘Well it wouldn’t happen to me’, and of course you tend to feel somewhat invincible when you’re younger, but this should be a cautionary tale for anyone in such a situation, especially when we consider the rise in freelance/contract/zero hours work.
If you get ill or unable to work for any reason, and you’re employed primarily in one of these roles, then the chances are you could be struggling to survive financially unless you’ve had the foresight to either put away enough savings or you’ve seen an adviser who has outlined how a protection policy might well make all the difference should the worst happen.
I’ll be the first to admit, that this is not going to be an ‘easy sell’ to many audience groups and we all know that protection has always been a product which is rarely proactively bought but needs selling – think of our millennial generation and think of the financial responsibilities they already have to cover off each month, whether that be rent, student loan, travel, etc, and you might be able to understand why shelling out for a protection policy each month is unlikely to be top of their priority list. But, if you can get in front of them, ask how they might cover all of these commitments if they were unable to work, if they had no company support or savings to fall back on, if they couldn’t move back in with Mum and Dad for the duration, etc.
These ‘what if’ scenarios might not seem likely to individuals but show them case studies and examples of when this sort of fate did befall an individual or client and the difficulties it presented, and it might make them think again about the cover and protection they have (or rather do not have) in place to tide them over should it happen to them.
Winning the job of mortgage adviser to these individuals might seem like many years away, but that doesn’t mean they shouldn’t be a client of yours well before that point. It’s a question of finding these individuals and ensuring they’re aware of what you can offer to ensure they don’t get themselves into financial difficulty should, for no fault of their own, their circumstances change. The ‘protection gap’ is already huge but by targeting the younger generation, advisers have an opportunity to make sure it doesn’t get any bigger.
Rob Clifford is a director of Stonebridge Group
