SPECIAL FEATURE: The value of protection specialists
In terms of client priorities, securing the mortgage finance may be number one however I’m not so sure protecting that mortgage, the client’s income, their family, their health, should be any less important. In fact, there’s a very good argument to suggest it’s rather more important, which can make the decision of advisers not to offer protection advice somewhat odd.
Far be it for me to tell mortgage advisers how to run their businesses but I do think that a level of diversification is not just a ‘nice to have’ but an absolute necessity in today’s marketplace. Those advisory firms that survived the Credit Crunch and subsequent recession were undoubtedly the ones that diversified, recognising that at a time when lenders’ appetite (and ability) to lend was severely compromised, other products and services would need to be offered.
Moving up to date, I fear that many mortgage advisers might not be as keen on diversification as they once were – this is not to suggest the mind might not be willing but with increased levels of mortgage business, how best to use the available resource? Perhaps understandably, it is ploughed into mortgage advice but the protection opportunity doesn’t have to be missed. The other problem being, of course, that many advisers might not feel they have the necessary protection expertise and knowledge to be able to operate at the top of their game with clients.
This again doesn’t need to be a hindrance. While some advisory firms will have a dedicated protection adviser, most will probably not and they will attempt to muddle through themselves or simply not offer the service in the first place. Both options, to my mind, are mistakes and the best option would undoubtedly be to utilise a protection specialist to cover off the clients’ needs in this area. They can then take on the advice role and be able to talk confidently about life/critical illness changes, trusts, family protection, and all other areas of this sector.
Those firms that contemplate an introducer arrangement are often put off by the perception that they are somehow losing control of the client and are fearful they might never recover it and the client will end up being lost to them. There are simple ways to mitigate against this, and it’s certainly the case that any adviser who does not have written agreements on this matter, should not introduce their client on.
We, on the other hand, recognise how important this is to firms and individual advisers. This is why our introducer contracts state that client ownership remains firmly with the introducing broker/firm – anyone not getting those types of guarantees should steer clear of that relationship.
The other important part to remember when it comes to introducing clients to a protection specialist is that this is not just about new clients. We have arrangements with a number of firms who refer back-book clients to us – so we can review the existing policies in place – and also new business. The process is the same and, let’s not forget, that an introducer fee is paid to the referring firm for every piece of business written, which can turn a very small amount of work into a lucrative income generator.
So, while mortgage business levels may be strong, in today’s marketplace there is no excuse to neglect the protection needs of your client. If you’re unable or unwilling to look after them, then a simple referral to a specialist will do the job just as well providing peace of mind to the client and delivering a greater degree of diversification for your business.