Charlie Campbell, policy adviser for protection at the Association of British Insurers, said that providers must rise to the challenge of the workplace protection gap, but may need a trigger from government to help spur them on.
“The same goes for advisers, as it historically hasn’t been that easy a sell or that great in terms of remuneration,” he commented.
“Advisers also need to help push for simplification of products from providers and help dispel some of the myths and mistrust around insurance - that will certainly help get the government to act.”
Roy McLoughlin, partner at Master Adviser Financial Planners, and Mr Campbell stated trying to add protection to the current roll-out of auto-enrolment would not be helpful at this stage, but that there was no harm in advisers piggy-backing on work with small employers going through staging or re-staging in the next few years.
The duo also agreed that this fits with the Conservative party policies focused on personal responsibility.
Mr McLoughlin commented: “Auto-enrolment is all about the personal responsibility push from the state, the next step is protection. It takes a bit of paternalism from employers, but the costs really aren’t that bad; maybe £100 per head per year for death in service benefits.
“Everyone will now have a pension scheme, so employers now have to look at ways of differentiating themselves in terms of employee benefits.”
Mr Campbell added that this is why the ABI is focusing firstly on income protection, as that appears to be the best way to get a foot in the door.
“The government can provide more for less, which fits in with the Conservative’s agenda; it’s very much about shifting the responsibility for pensions and protection back onto individuals.”
Mr McLoughlin added that working with smaller complanies on their employee benefit packages provides good, fee-based work for IFAs.
“They all need help with communicating these new benefits and that’s where advisers come in, doing short presentations to staff, because HR departments are paranoid about being seen as giving financial advice.”
John Ritchie, chief executive at digital group risk specialists Ellipse, pointed out that even the largest corporates are failing to properly communicate the value of the benefits they offer staff, so there are certainly opportunities out there.
“Forward-thinking advisers should be illustrating what protection and life cover costs when they do auto-enrolment work with corporates, I think most employers and employees massively overestimate the price of it.”
Paul Avis, marketing director at Canada Life Group Insurance, told FTAdviser that he finds it a constant frustration that advisers do not fully communicate the range of benefits available to the employers they are selling protection cover to.
“Advisers have all the materials available to them, I don’t understand why they don’t use them to maximise the purchase. HR departments are often worried that if they tell employees about insurance benefits they will go off sick, but in reality genuine cases get free vocational rehabilitation services, so it’s in fact the opposite.”
Tom Conner, director at insurance brokerage Drewberry, added: “It would be useful if insurers would send out annual one-page comms to their clients reminding them of the policies they have and the benefits and ways to claim; this would help to compliment the work advisers do around retention.”
Mr McLoughlin also argued that the government should incentivise such employee benefit sessions through a similar tax break to the one in the Budget, which introduced an income tax exemption for payments made for advice on transfers out of DB schemes to DC pension schemes.
peter.walker@ft.com
