Mortgage brokers have reported an uptick in protection business, referrals to specialist advisers and conversations with clients over the last year.
Consumers too are more aware of the need for protection, with younger people especially conscious of income protection (IP), but most cannot remember discussions with brokers.
The results come from the Association of Mortgage Intermediaries (AMI) Protection: Moving forward research which quizzed 5,000 consumers and 253 mortgage advisers.
Notably two thirds (64%) of the mortgage advisers surveyed noticed an increase in their protection business since the start of the pandemic.
Similarly 57% of advisers said protection discussions with clients had increased while 25% were referring to a specialist adviser, up from around 14% last year.
The report highlighted a disconnect between consumers being aware of the importance of protection and adviser actions.
While more than half of consumers (52%) believe protection is important, and 99% of advisers said they raised the subject with clients, 64% of consumers did not remember discussing it.
And only 27% of mortgage customers who used a broker had ever bought protection products from them.
Better advice conversations needed
But contrary to popular belief the report found cost was not the main reason for not purchasing protection.
The largest reason was not thinking they needed the products (37%) while the report suggested another contributing factor could be that 42% of consumers thought an adviser would only raise protection to increase their commission.
However, they would change that view if their adviser took more time to talk about it (14%), explained why they felt a protection discussion was important (20%) or put more emphasis on how protection products could help them (19%).
Although only 7% of people reported having IP, awareness was increasing as a result of the pandemic with 18% of those not covered saying they were more likely to consider it.
Younger adults and those with children were, perhaps unsurprisingly, much more likely to consider it at 40% and 42% respectively, compared to 19% of 35 to 54-year-olds and just 4% of over 55s.
AMI chief executive Robert Sinclair noted there was progress in some areas but work to do in others.
“It’s positive that we are seeing consistent messages from consumers again this year, in the sense that we now have a clearer picture of areas that need our attention,” he said.
“Too many consumers distrust the motivations of their adviser. It’s important for us to have proper dialogue as a sector about how we overcome this – we hope it will be an area of priority for AMI’s Protection Specialists Group in 2022.”