Business protection doesn’t need to be complicated. With 5.9 million businesses in the UK – each with their own specific financial needs – you could be missing out on a great opportunity to grow yours.
According to the Office for National Statistics (ONS), there were 2.72 million value added tax (VAT) and/or Pay As You Earn (PAYE) registered businesses in the UK in March 2019.
Seventy-three per cent of these are limited companies, with 46 per cent of them single employee limited companies – highlighting that there’s a significant number of businesses whose financial viability relies on just one person.
While business continuity and succession planning may not be high on the priority list of many businesses, losing a key employee could have a devastating financial impact on them.
So it’s important that businesses consider and plan for the unexpected.
From a business continuity perspective, would they be able to continue if one of the business owners were to die or become critically ill?
Every business will have certain key people who are vital to its success and prosperity.And while business succession planning is a key part in protecting the stability and continuity of a business, frequently little or no consideration is given to this.
Business protection can help make sure your clients can continue trading.
It also allows the owners to maintain control, while making sure their dependants receive a fair value for their share of the business when they die. Put simply, it provides a financial safety net for their business if something goes wrong.
Key people
Every business will have certain key people who are vital to its success and prosperity – people whose sudden and unexpected absence would have a serious detrimental impact on the future profits of the business.
With business protection in place, if these key people become seriously ill or die, your clients will have funds available to keep their business trading; replace key individuals; provide employee benefits; protect corporate debt; buy out a shareholder, or their estate, if they become critically ill or die, and make sure their dependants receive a fair value for their share of the business.
It’s likely you’ll already have clients with business protection needs.
While they might be aware of the need to protect their business, they’ll need advice to identify the right solutions.
Having good working relationships is key to a successful business.What’s more, the value of business protection is often higher than other types of protection, which means increased revenue for your business.
And if you’re not speaking to them about it, chances are someone else will. On the Aegon website our biztoolkit page offers more information on business protection.
Don’t lose out on genuine opportunities to develop valuable relationships, expand your business, and increase your profitability.
With many clients now more comfortable buying financial products online, the value for advisers, lies in areas such as business protection, where they can’t self-serve.
In this scenario, your advice and ability to create bespoke solutions is vital.
Solicitors and accountants aren’t allowed to give their clients financial advice.
So putting some time and effort into building a good relationship with local solicitors and accountants can be very rewarding for your business by generating a good deal of reciprocal business, such as shareholder/partnership arrangements and company valuations.
Having good working relationships is key to a successful business, but the thought of developing new professional connections can be daunting.
But there are clear advantages to having a steady flow of high-quality clients who have been referred to you because they have an identified need and are willing to seek advice.
Clients like this are more likely to be interested in profitable areas of business, and will have a higher than average conversion rate.
We all know word of mouth is the best kind of advertising. If you work successfully with other professional organisations in your local community, word will soon spread.
Making professional connections
From a client’s point of view, solicitors, accountants and advisers are perfect partners.
Clients rely on their solicitors and accountants at crucial points in their lives, such as moving house, setting up a business, getting divorced or making a will. These are also the sort of situations where they’ll need help with financial planning, including reviewing their protection needs.
And if a solicitor or accountant they trust recommends your services, they’ll be more likely to follow up and seek your advice.
On the other hand solicitors and accountants are unable to give their clients financial advice, so they may well be looking to refer clients to a financial adviser they trust – and that financial adviser could be you.
By forming a successful relationship with you, solicitors and accountants can offer their clients a wider range of services.
This will lead to greater client satisfaction as their wider financial and legal advice needs will be met. In turn, this will lead to improved client retention and repeat business, as well as extra income from referrals.
Satisfied clients will recommend their solicitor or accountant to friends, while you might be able to refer clients of your own back to them.
Stephen Crosbie is protection director at Aegon UK
