An industry panel at today’s FSE London have argued that protection sales and penetration rates might suffer as advisers focus more on the mortgage needs of their customers.
There is an estimated combined mortgage and product transfer market of over £400 billion this year, the panel said.
Peter Brodnicki of MAB said that mortgage advisers might well feel they don’t have the time and/or resources to deal with the protection needs of their clients alongside the mortgage.
“Protection will take a back seat if we let it,” he said. “At the moment, the mortgage could well be taking priority, whether that’s down to the broker having the time or the inclination to do it.”
“Protection is a massive market,” he added, “but I worry that if we go down an automated route [with mortgage advice], protection will just drop out of the process.”
Esther Djkstra of Lloyds Banking Group said: “It is worrying that I think we have more rabbits with pet insurance in this country, than there are people with income protection.”
The panel argued that, at the very least advisers should be raising the protection needs of their clients and ascertaining what protection levels they currently have in place. “There is a risk here that we could dilute the conversation around protection,” said Chris Pearson of HSBC. “At the very least we should be having a very robust conversation about protection with them.”
A broker attendee at the session pointed out that it was very difficult to get details on a client’s protection coverage, suggesting it was more likely to be “found in their loft” and Robert Sinclair of the Association of Mortgage Intermediaries (AMI) suggested the protection providers had to get better at sharing this information and providing a technology solution that would allow advisers to see current protection levels.