The phrase ‘holistic financial advice’ can often seem over-used in today’s media circles and some advisers may be turned off by the thought of another industry commentator ‘harping’ on about it.
The fact remains however that there would be less focus on ensuring advisers cover all the financial services’ needs of their clients if there was growing evidence to suggest this was truly happening.
Unfortunately, we are continually provided with data which shows this not to be the case.
Just last week Defaqto released research which revealed that a third of all new mortgages have no life cover associated with them and while, yes, there may be some individual circumstances where this is not appropriate, in the vast majority of cases we are looking at a significant debt where, if the worst happened, there would be not cover in place to pay it off.
The so-called ‘protection gap’ grows wider each year and, while for some this may be a ‘tightening the belt’ economic period where certain insurances seems like a ‘luxury’, life cover should really be a non-negotiable.
Ultimately, however, it is up to advisers to ensure that their clients are adequately protected particularly in times of uncertainty; lest we forget the UK only recently emerged from a recession and with the stringent public sector cuts that are coming who knows what the future holds for many people across the country?
While clients may not wish to think about losing their job or becoming ill in the future, it is up to the adviser to ensure this is discussed, considered and planned for.
Of course, in financial services it is not just about the life cover or general insurance or protection needs of their clients. Last year unbiased.co.uk carried out research which revealed that 57% of people do not have a will, a figure which rises to 65% for those who have children under 18 years of age.
This seems a staggering figure given that dying intestate essentially means that the wishes of the individual will never be met and instead the assets are divided up based on strict intestacy rules. Ask yourself how many clients would be happy with this state of affairs, particularly when it now takes very little time and costs a relatively small amount to put a will in place which clearly details the wants of the client.
Many advisers may feel that wills falls outside their domain, but given that understanding the financial needs, interests and wishes of a client are at the heart of a financial advisers’ role how can this be the case?; other needs such as, for example, private medical insurance, equity release, etc, can also be met by an adviser willing to put in the work and provide the necessary advice, information and support.
In essence there are ‘gaps’ across a whole range of financial needs not just protection and for the adviser to ignore or gloss over these means they are, firstly, not delivering a rounded advice proposition to their clients and, secondly, they are missing out on significant income-generating opportunities.
And there’s the rub in all of this.
For those unable, unwilling or just too focused on other services to take on these opportunities, these requirements can be fulfilled via professional referral processes.
Most advisers will have a considerable client bank to access and to provide for.
In my experience these client banks can be the equivalent of gold bars but are too often treated like lead bricks.
The use of smart client segmentation and appropriate marketing can open up significant opportunities and importantly ensure advisers provide a better service to existing customers whilst, most critically, improving revenue most of which is recurring – and as we all know it is the recurring revenue which adds the real value to an advisory business.
Don’t let the opportunities or the revenue go to waste.
