Support services have experienced a significant upturn during the coronavirus pandemic, with some insurers seeing uptake levels like never before.
But not all advisers signpost these services regularly enough, says Setul Mehta, head of business development & adviser services at The Openwork Partnership.
He says Covid has helped put a spotlight on services such as virtual GPs, which has led to more people talking about them and further take up, but more needs to be done to ensure advisers comply with the spirit of the Financial Conduct Authority's new consumer duty rules, which come into force next year.
"Value-added services used in the right way are really essential," says Mehta. "The world has moved on from 10-20 years ago where you took out a life or critical illness policy and waited for the day you have to claim or hopefully you never have to claim. Today's policies are for everyday use."
Value-added services are offered across the protection landscape and can either be priced into the policy and offered for free at point of use, or they can be offered in the form of chargeable bolt-ons.
The idea behind value-added services is all about 'can we stop clients from making a claim and can we help people live longer and healthier lifestyles'?Mehta says for some people valued-added services could be just as valuable as the policy itself. It is not just about getting a payout, he says, it is about "what happens thereafter to try and get your life back on track".
He also says a policy's support services can be a factor in determining the suitability of the product itself. And companies have started to evolve their software to allow advisers to segment recommendations based on certain value-added services.
Consumer duty
Industry veteran Johnny Timpson told FTAdviser earlier this month the FCA's consumer duty rules will have an impact on how advisers will be expected to handle support services.
He said: “Support services are a feature now of every provider's proposition, but they are under-used.
“Given the focus on better supporting vulnerable customers, and the higher standards required by the consumer duty, we have to do far more to make sure that consumers are made aware and kept aware of the support services available to them, because they are paying for them.”
Mehta agrees: "If you start to understand clients and their wider needs no longer is it simply income protection, critical illness, serious illness, life cover, accident protection, [it's] more about an individual and their lifestyle, so [advisers] can start to think about other areas of support."
Verdict
For Mehta the key is always to get the client protected, and then advisers should be questioning the severity of not using the support services available.
"If the lady in the case study hadn't engaged with Aviva's DigiCare+, hadn't had an appointment, one of two things would have happened: one, nothing, other than she would have been in a little bit more pain until the GP was able to take those blood tests; or two, she would be in significantly more pain and ultimately could have ended up getting an income protection payout because she was unable to work."
He says he believes the latter scenario was likely in this case.
"So what that's done is expedited her ability to get a solution," he said. "The idea behind value-added services is all about 'can we stop clients from making a claim and can we help people live longer and healthier lifestyles?'"
He suggested advisers should consider writing to their clients regularly to remind them of the support services that exist, adding: "Consumer duty isn't just about making sure that clients are aware but actually we should be sharing some of the results and their circumstances.
"If we can share some of those stories with other clients and others in the industry then we can raise awareness."
carmen.reichman@ft.com
