It means the opportunity to help business owners protect their families, their employees and their businesses is bigger than it has ever been before and that the financial architects and merchants of wisdom of our industry who are supported by market-leading and well-designed propositions are in the best position to bridge protection gaps and help reduce the burden of financial stress, which in 2019 cost the economy £121bn.
In 2020, Guardian surveyed 421 advisers around the willingness of their clients to talk about protection. Of the advisers surveyed: 75 per cent said there had been an increase in willingness by clients to talk about protection; 83 per cent who ‘didn’t always talk about protection’ are now discussing it more frequently; 37 per cent had seen an uplift in protection enquiries from new clients; and 39 per cent had seen an uplift in protection enquiries from existing clients.
Another study showed that almost one in three respondents stated that they will be more careful in understanding exactly what their insurance policy covers them for.
From a propositional perspective, this means that clients are looking under the bonnet of adviser propositions now more than ever to understand the value of advice.
Legal & General conducted an interesting report where they surveyed 800 SMEs as part of a research piece called “State Of The Nation”. The sixth edition of this report stated that 84 per cent of UK SMEs have taken out a business protection policy because they were advised to do so by a financial adviser or bank. The report also revealed that 70 per cent of business owners had not heard of Relevant Life.
Key Person/Loss of Profit Cover. As Henry Ford once said, “you can take my factories, blow up my buildings, but give me my people and I will build my business right up again.”
Many business owners agree that the loss of a key person can have dire consequences for their business, yet in 2019, more than 50 per cent did not have any cover in place.
One reason for this was cost, and when asked to estimate the cost of insurance, the average response was almost 3x the actual cost. 52 per cent said they would cease trading within one year once the consequences of having no cover were explained to them.
These policies may also qualify for tax relief on premiums subject to the Anderson Principles being satisfied.
