Friday HighlightNov 17 2017

Opportunity knocks for IFAs

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Opportunity knocks for IFAs

In a tough market it pays to stand out from the crowd and, for IFAs who are not already doing so, it may prove rewarding to sharpen their focus on the Backbone of Britain – that is, clients who own and run their own SME businesses. 

While providing financial planning advice is an IFA’s bread and butter, advisers may be of even greater service by bringing to bear the insight and experience they’ve gained from running their own business to this group of customers.

In addition to having this insight, as these are existing customers, who better placed to understand many of their aspirations, ambitions and challenges?

And, while many of those who run their own business wouldn’t change it for the world, it’s rarely all plain sailing.

1) Potential pitfalls

The list of potential pitfalls is a long one. For instance, when we asked SME bosses what keeps them awake at night, one in four (26 per cent) said that they worry about the impact of work on their lives.

This survey was carried out among 507 SME senior decision-makers September 2016 by market research agency Atomik.

And one of the biggest impacts is working long hours – nearly nine out of 10 (88 per cent) of the bosses we polled said that they and members of their teams regularly work more than their scheduled hours. 

Insurers are providing advisers with the information and support they need to meet their business clients’ needs. 

While pressure can be motivating and a spur to greater success, it’s important to remember that we are after all only human and that too much pressure for too long or in the wrong place or at the wrong time can bring us down and undermine our performance and productivity.

Indeed, according to a newly published report from the Centre for Mental Health (Mental health at work: The business costs 10 years on), mental health problems in the UK workforce cost employers almost £35bn in 2016 – £10.6bn in sickness absence costs, £21.2bn in lost productivity of employees working when unwell and £3.1bn in staff turnover costs.  

2) Challenges of hiring

Clients whose businesses are on the up may well be hiring, which brings its own rewards and challenges. Good people are hard to get and keep and you may therefore be able to help your clients consider their key employees’ protection needs in addition to those of their own. 

For example, the bosses we surveyed said sickness absence was an issue in their business – over half (57 per cent) said they’d had to deal with absence spells of four or more weeks at some time, leaving those left behind to try to pick up the load.

Other people concerns identified by our research included losing staff (29 per cent), lack of loyalty (25 per cent) and shortage of skills (24 per cent). The first two are particularly worrying as it can be costly to replace people who leave – around £28,000, on average, in time and resources to recruit someone suitable, according to our study.

3) Wellbeing is critical for success

As it’s widely accepted that employee wellbeing is critical for success, having the know-how to advise on or introduce it can strengthen your relationships with clients by widening the conversation to include this important topic.

When it comes to protecting clients from the financial consequences of illness or injury, it can, therefore, pay to have a working knowledge of healthcare, income protection and key person cover (and, while you may not wish to enter the general insurance broking arena, being mindful of the general insurances needed to keep a business up and running should help convince your clients you understand the bigger picture). 

4) Begin with Number One

When it comes to personal protection, arguably the best place to begin is with Number One. It’s a business imperative and, sadly, a truth universally acknowledged that, as we get older, it’s more a question of when rather than if we’ll need medical care.

And, with ever increasing pressure on the NHS, getting the care you need at a time and place that works for you and for your business can be a challenge.

Better still, becoming better acquainted with protection need not be daunting. The good news is insurers are providing advisers with the information and support they need to meet their business clients’ needs – from background briefings and technical training to tailored sales and promotional material.

IFAs can also set up introducer relationships with specialist insurers to take the lead on sales and service, which, while less hands on, can earn a welcome, steady income stream. 

So, if you’re not advising on or introducing protection cover, think again – you may be pleasantly surprised to see what it can do for your business.

Paul Moulton is SME director for Axa PPP Healthcare