Opinion & Analysis
Mortgage and income protection-it’s about time.
02 Aug 2023
Time has always been the enemy of mortgage and protection advisers, and no more so than in the current market, but I truly believe that if we are ever going to close the protection gap, prioritising, and dedicating quality time to protection, is the answer.
Giving protection it’s importance from the start. According to AMI Viewpoint research ‘there are many reasons that consumers do not always buy protection from their mortgage adviser, ranging from wanting to focus on their mortgage only (19%) to wanting to do it at a later date (10%). These statistics don’t come as a shock, but the surest way to overcome client apathy is to set clear expectations from the very start, that protecting themselves is an integral part of buying a home.
It’s not just about the here and now, it’s about all the years ahead, and that is why advising them not only on buying their home, but more importantly how to keep it, is standard. Asking clients to get a hold of any employee benefits and existing policies, at this early stage, will help set the scene too -its essential everything is taken into consideration, no stone unturned.
Giving protection the time it deserves. Particularly since lockdown, the practice of full-on face to face appointments has declined, replaced in the main by phone calls and even emails. Often, I hear that clients have asked for appointments to take place during their drive home from work or to be squeezed into their lunch break, hardly the time nor the place. I guess when pushed for time, it might seem like a win for the adviser to get the protection conversation box ticked by means of that quick fix, but ultimately, I don’t think it serves clients or advisers well.
A thorough protection conversation takes time and care, after all, the client’s future financial resilience for many years to come could be at stake and needs careful consideration, I don’t believe this can be achieved meaningfully while they are waiting in a queue in a sandwich shop or driving in rush hour traffic. Surely, it’s in the client’s best interest, at such a pivotal moment in their lives, to be encouraged to invest some of their time to have a proper consultation. When we believe protection is a priority, clients will too.
Learning about what’s important to your clients. AMI’s Viewpoint stated that ‘Half of consumers (50%) believe commission is a broker’s main motivation”, a sad reflection on our industry I feel. But I think a contributing factor is when advisers neglect to take the time to understand their clients concerns and thoughts on the future, and instead launch into a products dump with no connection to their circumstances.
Consumer duty states that we must ‘enable and support retail customers to pursue their financial objectives’; Sometimes clients have never even considered the what ifs; protection can be a completely new concept to them. So, we need time to ask those what ifs and find out what their objectives are first and foremost, then deliver the products that link to, and solve, their problems.
Make it memorable. Another worrying problem revealed by AMI Viewpoint is that many clients do not remember having a conversation with their adviser about protection, and I don’t believe this bodes well for clients or advisers. Consumer duty requires us to ensure clients are made aware of protection, how can we make a deeper impression?
Explaining the benefits of protection to clients is essential, but sometimes it’s in the asking of questions and opinions of clients that they can see their needs more clearly. Many advisers tell stories, some of their own experience, some of their client’s claims, some of case studies, but the good news is that no matter the type of story, these can resonate with clients. Matching particular policy features to things that really matter to them, for example fracture cover because they play sport every weekend, GP 24/7 services because they have a young family and can never get to see the doctor when they need one or children’s cover because they mentioned they want to start a family, all these ‘links to their needs’ make it personal and far less likely to forget.
It’s an exciting time to be in mortgage and protection advice right now. Given the current market conditions, the challenges of cost of living crisis and the herald of consumer duty, I believe there has never been greater need to engage in conversation with clients about protecting their future and building financial resilience for tomorrow, just give it time!
Angela Davidson is Head of Protection at Mortgage Intelligence