So, the doomsday merchants were wrong. It’s clear that auto-enrolment has been a resounding success but, even more importantly, there has been a crucial role for advisers in its implementation. Many will remember the absurd claims by certain government ministers that there was no room for advice in the auto-enrolment revolution. This has proven to be both naive and also to underestimate how much the public still values financial advice. If anything, the doors that have opened on the corporate side in the last five years have actually exposed the growing need for good advice and the lack of advisers in the UK.
Auto-enrolment means that many people have been exposed to a financial services product for the first time. This provides a great platform to have a conversation with them about other products. If auto-enrolment makes them think about self-sufficiency in retirement, what other areas can advisers point to that also require self-sufficiency?
Millions of people in the UK live with one or more long-term physical or mental health condition and this is stretching an already overstretched welfare state to breaking point. The fact is that in the event of long term ill-health most people would be unable to rely on the welfare state to cover their liabilities, such as mortgage repayments. This issue of course lends itself to a discussion about income protection (IP). People seem to be finally waking up to the need to protect their income in the event of long term illness and it was heartening to see recent results from digital solutions provider iPipeline that showed a 75% year on year increase in IP sales[i]. There is also growing awareness around mental health and many income protection providers offer a number of services and product features that help those suffering from mental health issues, ranging from dealing with the cause to helping them get back into work.
This leads on to the huge opportunities available in the corporate space. The average company in the UK actually has 10 employees not 1,000 as some might think and advisers should be grasping this opportunity to sell relevant life policies. Relevant life cover is a great way for smaller businesses that don’t offer a group life scheme to provide their employees with flexible and cost-effective cover. It can also help employers attract and retain top talent by offering their employees valuable life protection at a reduced cost to the business.
Advisers should also take a close look at business protection, especially as several insurers offer excellent training on this product. With this there is a natural link to group risk, and it is shocking that benefits such as group income protection and death in service aren’t experiencing growth. Once again, I would encourage advisers to explore these areas as the potential marketplace is huge.
Finally, there are massive opportunities for advisers to break out from the natural silos that our rigid profession often creates. Even a director of a small company will need wealth management and mortgage advice at some point. They may be areas that you don’t feel comfortable advising on but, if that’s the case, why not create a strategic alliance with advisers that do? Talk to your solicitor and accountant contacts and you will quickly discover that they work in cross referrals every day.
18/06/2019 | This article’s view is based on the law, practices and conditions as at the day of publication. While we have made every effort to ensure they are accurate, we accept no responsibility for our interpretation or any future changes. | VL O 0126