This means that the need to review a client’s circumstances and the need for flexible products that can cope with changes are more important than ever.
Annual statements can provide a helpful trigger for a review, to look at what’s changed. For instance, should children’s cover be added to a plan because of a new arrival, or maybe taken away because the child is now too old to claim?
And what about job changes, promotions or house moves?
In the past 40 years, we have seen greater compliance oversight of the sales process, with ‘reasons for recommendation’ reports and increasing and better use of technology (think personalised risk reports and more).
What has not changed is that it is still potentially challenging to encourage customers to reflect on things they would much rather not think about; death and disability, most obviously.
At the heart of a financial review will be an understanding of how the client will cope financially if the worst happens – what will the financial impact be on family and dependants?
The adviser should be opening the client's eyes to the likelihood and potential financial impact of an inability to work, a critical illness or of death itself – confronting issues that may be difficult or uncomfortable, but without inappropriate scare tactics.
An Association of Mortgage Intermediaries report on protection, published in November this year, highlights that 57 per cent of advisers say protection discussions with clients have increased in the past 12 months and 42 per cent say their clients are now more open to discussing protection.
It also found that 40 per cent among those aged 18-34 would consider income protection due to Covid-19 when they would not have done previously.
The report does suggest a perception to be overcome: 42 per cent of people believe protection is brought up only to increase broker commissions, while just 30 per cent say the broker wants to ensure full protection for their client.
The question is: how to change this?
At an industry level, there will be more we can do. Collectively, we need to continue to fight the misconception that claims are not paid – they are, in very large numbers, and we should be very proud of that.
And for those clients who might need convincing, there is more material available than ever – claims statistics certainly, but more importantly claims stories, videos, breakdowns of the reasons for claims and clear explanations as to why, very infrequently, claims may not be accepted.
There is no one best way to sell protection, but there are some common themes that I hear of more regularly now.