In Focus: Protecting your client  

Q&A: Advisers are missing a trick with business protection

What surprises people when you break into this world, [is] the respect and the desire for the advice. It’s much easier than people think.

FTA: Are advisers missing a trick when it comes to selling business protection?

RM: 100 per cent. This is an area where there is basically no competition. It’s a great place to be, plus, generally, business protection sticks to the books. So you don’t have some of the lapse problems that some of the individual protection advisers sometimes have.

It’s a viable and lucrative business model that opens up doors to other levels of financial advice. It’s good for wealth management and also group opportunities because you tend to be talking to decision makers who, as well as looking at some of the key people at the top, will also want to protect their staff and that leads to chats about group protection.  

FTA: Is there an opportune time to sell business protection, for instance, combined with other advice?

RM: There isn’t a good time but there isn’t a bad time either. But it’s very important that the adviser arms his or herself with certain facts, for example about what happens when small businesses get into trouble. You need anecdotal evidence, having some of those stats to hand is vital.

But also in terms of timing when a business sets up, from day one it’s as good as a year down the line because weirdly the exposure at the start of a business’s life is arguably bigger than later on. 

FTA: What about the products themselves?

RM: They are not overly complicated but you have to learn them. Once you’ve learnt them you realise that they are exactly the same as protection products, just for businesses.

Cost wise, often customers are very surprised as to how good value for money they are. The alternative is basically to self-insure. Stats show the cost of not listening to us is more costly than the cost of listening to us. 

FTA: What about payout rates?

RM: They are all phenomenal, way into the 90 per cent. If you look at the reason for why they don’t pay out sometimes they are all very easy things to explain, such as non-disclosure. You hear that argument [about low payout rates] all the time but it’s nonsense.