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Financial resilience has been 'pushed to the limit'

Financial resilience has been 'pushed to the limit'
Guardian chief executive, Katya Maclean

From a protection perspective, people’s financial resilience has been "pushed to the limit" this year, Guardian’s chief executive Katya Maclean has said.

Speaking to FTAdviser Maclean said the need for protection has been amplified this year but “the squeeze on household budgets requires more effort to be put into the conversation".

She said: “If I had to choose one word for 2022 it would be tumultuous. Rewind 12 months, we were moving towards the end of the second year of living with the pandemic. 

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“The collective feeling of uncertainty was compounded by Russia’s invasion of Ukraine. Driven by these factors, as well as the aftermath of Brexit, a cost-of-living crisis began to take hold in the UK, prompting inflation, interest rate rises and a worsening economic outlook.”

In Maclean’s view, the second major theme of 2022 was the consumer duty, which she described as a “shift in focus” from the regulator.

The new regulations require all firms to act to deliver a good consumer outcome, as well as act in good faith, avoid foreseeable harm, and enable consumers to pursue their financial objectives.

“Providers have spent 2022 looking at the quality of their propositions, the clarity of their communications, and ensuring they can demonstrate they are meeting the guidance,’ Maclean said.

“Advice firms have been looking at where protection fits into their advice conversations, and how effectively their processes and procedures enable a good consumer outcome.”

The year ahead 

Maclean noted that for forward-looking businesses, this year has been about staying ahead of the curve with regard to “the ever-growing digital expectations of clients, advisers and partners”.

She explained that Guardian updated its quote and apply system, as well as its pre-sales underwriting tool this year to support advisers in “bringing their work to life”.

The firm also made changes to how it deals with mental health by making it easier and faster for clients with mental health issues to get a decision and be offered appropriate terms.

“We also spent time looking at the implementation levels of electronic GP reports by GP surgeries, and the important role these play in accelerating turn-around times and improving client experience,” Maclean added.

While Guardian used this year to update elements of its business model, Maclean noted that next year is set to be a difficult one as experts predict a prolonged recession.

“Our task ahead is to support advisers in demonstrating the value of protection to clients,” Maclean said. 

The protection firm has aimed to be ahead of the curve when it comes to supporting clients through the economic uncertainty and has undertaken research among 700 advisers to understand the impact it is having on their protection conversations with clients.

Guardian compiled the results into a white paper which it circulated to advisers to help them navigate the challenges ahead.

Writing for FTAdviser back in July, Guardian’s marketing and proposition director Jacqui Gillies reminded advisers that “the need for protection, and the value it brings, remains constant”, particularly during phases of economic uncertainty.