Advisers are missing out on heaps of potential business by limiting themselves to only recommend individual protection, experts have said.
Group protection — where products are sold to employers to cover their employees — was described as an "untapped market" with "massive potential" for independent financial advisers at the Protection Review conference yesterday (July 11).
Chris Morgan, head of group protection distribution at AIG Life, told the conference that about 96 per cent of employers did not hold a group protection policy but 30 per cent of the UK’s workforce was covered by a group policy.
This is because larger employers are more likely to be offering the product but Mr Morgan stressed that the majority of businesses in the UK had less than 10 employees and that advisers were "well placed to capitalise" on this shortfall.
He said: "Encouraging employers to protect their staff is key. Group protection is a low cost, easy way for employees to access financial benefits.
"Helping an injured or ill employee to return to work as soon as they can benefits both the employee and the employer."
Claire Ginnelly, managing director at Premier Choice, agreed. Speaking at the conference she said: "Advisers are restricting themselves if only looking at one part of the market.
"There are a lot of opportunities sitting right in front of advisers as long as they’re asking the right sort of questions."
Ms Ginnelly said employers were likely to already be in an adviser’s client bank so the IFA could easily capitalise on this.
She said: "For instance, if you set up an individual product for an executive or big boss you can go back in six months time to discuss setting up the group product for their employees.
"Then, when you explain the group product to the employees you can include what isn’t covered and get some individual leads from the employees themselves. It’s about increasing business."
Ms Ginnelly added that advisers needed to talk to their clients about the whole range of products out there to offer a "full service", especially when products like group protection had "great value added services" which added benefits for employees.
She thought one of the main reasons advisers didn’t cross over into group protection was because they were concerned it was too complex, but Ms Ginnelly stressed that the two sectors were "extremely similar".
Natalie Summerson, head of sales at Canada Life, revealed research that found 44 per cent of advisers had regular conversations with their business clients but only 16 per cent had regular conversations about group protection.
She said: "IFAs hold the key to increasing group protection. The opportunity is there and sits within your client banks.
"The products are simple — and if you’re already advising on individual product then you can advise on group."
Figures revealed to the conference by Dan Crook, sales director at Canada Life, backed up the argument that the group protection sector was an untapped market.