In Focus: Protecting your client  

Why this protection adviser shut up shop after just six months

The firm decided to approach broker network Primis. Fully aware building relationships with accountants would take time, Marriott told Primis the business would generate the bulk of its income in the first 18 months from advising clients with individual voluntary arrangements.

IVAs are a debt repayment solution. Those on one are given an allowance for outgoings, and life insurance can form part of that allowance. If there is money left over, IVA introducers can refer clients to an adviser for a fee.

Marriott said CSE had managed to land a number of large contracts with IVA introducers. One contract generated 40-80 leads a month.

“An IVA firm only works with a client for three months,” Marriott explained. “Whereas accountants work with their clients day-to-day over years. There’s a much bigger trust barrier to overcome.”

He continued: “You want them to pitch business protection to their clients and then hand them over to you. So they might give you one client. Then they’ll wait. And maybe you’ll get another. But nothing is guaranteed.”

Marriott had previously advised at Freeman Jones - a firm which specialises in IVA clients - for more than three years.

“We'd dealt with these clients before so we knew they were potentially very vulnerable,” the founder explained.

“We would give full advice first, and then tailor it to the allowance, and we would tell them we were separate from the IVA firm and that this wasn't compulsory.”

The business plan was approved by Primis and the firm got started. 

‘Leads dried up overnight’

But five months down the line Primis told CSE it could no longer take on any business from IVA introducers, which had devastating consequences for the young start up. 

“Our leads dried up overnight,” said Marriott. He tried to change the network’s mind.

“We did a report for Primis to prove our ability to provide whole advice,” Marriott explained. “But we still weren’t allowed to do it. So we asked Primis for more training and said they could listen to our calls.”

In the end, Marriott and his partner were told no business model with IVA introducers involved would be considered. “They kept saying they didn’t want that risk profile.”

Primis does have other firms in its network dealing with IVAs however. 

It told FTAdviser it did not implement a blanket approach when it came to firms working with customers who have IVAs and was dealing with each scenario on “an individual basis”.