The majority of wealth advisers would place greater emphasis on protection if they knew how to demonstrate it to clients, a survey by Protection Guru has revealed. A new approach is needed says the firm’s founder.
Nearly three fifths (57%) of advisers said they would be more inclined to make protection part of their core proposition if they were able to demonstrate the need for protection to their clients, while a further 21% said that finding the right resources to help them address protection needs would make them most inclined to do so.
Protection Guru said insurers across the protection market are failing to effectively engage with wealth advisers and must take a different approach.
The biggest blockers to engaging with protection were found to be a lack of necessary training or tools to help wealth advisers give protection advice and the complexity of arranging protection, with both cited by 43% of respondents.
Since the introduction of Consumer Duty, the protection market has anticipated significant growth in referrals to protection specialists, however, 92% of advisers said they would want to write protection themselves rather than refer it to specialists, the survey showed. However, Protection Guru warned that if wealth advisers lack understanding of the need and value protection offers their clients and the products available, they will not recognise the poor consumer outcomes that can arise from a lack of protection insurance.
Ian McKenna, CEO of Protection Guru, said: “These findings demonstrate a clear case for engaging differently with wealth advisers. That may be an uncomfortable pill for some to swallow, but we now have the crucial evidence that the protection industry is failing to reach wealth advisers in the right way. It is time to rethink the approach altogether.”
McKenna said advisers often say their clients do not need protection because they are wealthy but warned that the level of wealth is “nothing like the level needed to have no protection need for cover.”
Mckenna added: “ Every financial plan fails without an income. Taking income from investments to bridge a serious illness can have a significant impact on the level of savings achieved in later life.”
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