The cost of living crisis and spiralling inflation present more opportunities than ever for advisers to talk to clients about income protection.
This was one of conclusions reached during a panel debate on the second day of the Income Protection Task Force’s Income Protection Awareness Week.
Very difficult conversations
Vicki Jefferies, proposition director at Primis Mortgage Network (pictured second from left) told the online audience that the “very difficult” conversations brokers are currently having with clients present opportunities.
“I think I still see it as a huge opportunity,” Jefferies said. “I think our instant thought is when we have to tell a client that their mortgage payment is £300, £400 more – how I am ever going to be able to bring protection into it?”
But according to Jefferies, it is precisely at this point that advisers need to talk to clients about how they can cover these increased costs.
“These customers have now got an increased monthly outgoing, far more than they have ever had before,” she continued.
“If you think about a traditional couple scenario, they may have thought if one of us is poorly and one of us can’t afford it, the other one will cover the debt. But now when you think about that kind of outgoing a month, that does become unsustainable for most people especially those on average incomes.
“So it lends itself to say, well how would you cover that? So you’ve instantly got an opportunity there, albeit yes, it’s going to be difficult.”
Illustrating costs
In terms of illustrating these unsustainable costs, fellow speaker Nicola McKenzie, founding partner at Dunham McCarthy (pictured third from left), revealed her company uses personalised charts where customers bills are stacked on top of their income.
She added that at the click of a button, a partner’s income disappears to illustrate the shortfall.
“It’s really, really powerful,” McKenzie continued. “It will show in order which bills will be paid and which ones won’t be paid if you lose one of the incomes. And we find that resonates really, really well with customers.”
Product transfers
And Jefferies added a further opportunity for advisers comes in the form of product transfers now being secured six moths ahead, rather three or four months ahead.
“A relationship with a client is quite a long period of time isn’t it?” Jefferies continued.
“You’re also probably going to be revisiting that product transfer and looking at different pricing. We’re seeing the lenders starting to reduce those rates. You might be looking at that.
“So it brings about more conversations with the client and more opportunities to engage. So if you’ve missed it on the first conversation, no problem.
“You’re probably going to speak to the customer again in six weeks’ time and you may be giving them good news. So again there is another opportunity.”
More opportunities than ever
Charlotte Nixon, proposition director at Quilter Financial Planning, (pictured fourth from right) agreed, adding: “Now with the cost of living challenge, people are a little bit more nervous now about what they can afford and what impact it will have.
“Will they lose their job? What impact will that have on them. So it’s a great opportunity.
“It’s that engagement.
“On the wealth side, they have a lot of engagement with clients. They see them every year for their annual review.
“Mortgages now, there are more opportunities than ever to go back to those clients and look at what the rates are looking like now and ensuring that client engagement and moving away from transactional advice is key and again a huge opportunity.”