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Advisers must protect their clients’ wealth

This article is part of
Guide to protection awareness

Advisers must protect their clients’ wealth

Advisers who eschew protection and focus instead on pension and investment needs could be doing a huge disservice to their clients.

This is the view of Alan Lakey, founder of CI Expert, who believes advisers in general have put protecting wealth so low down the pecking order of priorities it often does not get discussed at all.

Mr Lakey explains: “When I first started in this industry it was drummed into me protecting your income and assets was the very first step, and increasing wealth and pensions was subservient.

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“We now seem to have a two-tier advisory landscape where many advisers eschew protection and focus on the more glamorous investment/pension areas.”

He also claims network models seem to promote protection only as an ‘afterthought’ in many cases, so advisers belonging to networks are not actively encouraged to sell protection products.

Mr Lakey adds: “When I talk to networks they often tell me their mortgage advisers sell one protection plan for every four mortgages they arrange.

“One network told me approximately 25 per cent of their appointed representatives never sell protection, while only 20 per cent regularly sell it.

“I believe this is a big part of the problem. Add to this the relative complexity of critical illness and income protection and you can see why many limit their advice to life cover only.”

Face to face

It appears consumers believe face-to-face communication supercedes social media or print communication in terms of priority when it comes to getting information from the financial services industry.

Andy Nicholls, adviser for Beaufort Asset Management, says: “Advertising increases awareness but individual advice is key.

“That said, early education in the potential policyholder’s life will be the major contributor.”

At an investment conference last year, employee benefits consultancy Lemonade Reward conducted a poll among attendees on how they wanted the financial services industry to communicate with them.

The poll found 45 per cent of 108 total respondents polled preferred face-to-face communication.

Even when broken down among age group, most people young and old wanted facetime with an adviser.

How would you like to be communicated to?
Group Young, free and single Young family Mature familyPre-retirement
Face to face48% 33% 44% 76%
Seminar 23% 18% 12%12%
Digital 26% 45% 44% 12%
Print 3% 4% 0% 0%
Total
Source: Lemonade Reward

Digital communication was also important to the ‘middle earners’ - those with young or maturing families - who are computer literate and social media savvy.

Phil Jeynes, head of sales and marketing for UnderwriteMe, says: “Everyone should stop hiding behind compliance as a reason not to adopt 21st-Century approaches to marketing.

“Engage with digital technology to speed up business and cut down expense.”

Denise Wond, marketing manager for Royal London, says: “Much more has to be done to raise awareness with consumers. And that probably needs to start with advisers.