Geoff Hall is managing director of Berkeley Alexander
Industry feedback suggests that sales of ASU products are vastly down since the recent Competition Commission rules change leaving advisers running scared.
However the bigger risk lies in not discussing ASU with your clients, even if you don’t sell these products directly.
The regulators expect a professional adviser to be thorough when looking after their clients and it is therefore hugely important to discuss all possible areas where a client could be exposed and alert them to the existence and benefits of these products.
Here are our top five tips to take the stress out of ASU and make yourself mis-sale proof:
1. Talk to your clients and find out what they need. What is their income and savings status and how would they pay their mortgage and bills if unable to work? What are the terms of their employment contract? Do they have any other policies in place?
2. Assess their individual needs. Establish the type of cover they need, i.e. short term accident & sickness protection, long term PHI, cover against unemployment etc.
3. Establish their “acceptability”. Do they have any pre-existing medical conditions, have seen a doctor recently or know they will need treatment in the future? Are they aware of pending redundancies? Are they self-employed, a company director or the owner of a business? Do they work part time or is their job short term or seasonal? And, have they been with their current employer for more than six months? All of this is vital information that can affect a client’s eligibility for cover.
4. Ensure your are Co-Co compliant. Follow an established and compliant quote process that includes documenting the client’s personal details, researching which products best match the client’s needs, providing a quote pack including insurer details, premium information, a demands and needs statement and a key facts/policy summary and that you document all meetings to demonstrate that the client was fully aware of what they were buying, that it was optional and independent of any credit offer.
5. Remember the 30 day Rule. If you are arranging the mortgage and are subsequently arranging cover within 30 days, you must give the client a 7-day “cooling off” period before closing the sale on the insurance and issuing a “schedule 4eii” document. If you did not arrange the mortgage you can issue a “schedule 4ei” document and the 7-day cooling off period does not apply.
Even if you don’t offer ASU products at least alert the customer to the fact that insurance can be purchased and introduce them to someone who is prepared to provide a quote.
Even in the current climate ASU is still a product that is sold rather than bought despite clients arguably needing it now more than ever, but it really need not be an onerous task to sell it. These are vital protection products for your clients and can be a highly profitable line of business for you.