The requirements of Consumer Duty have led to many advisers thinking about the protection needs of their clients in a new way.
This shift in strategy and outlook will mean those who are not used to talking about protection will need to quickly upskill – unless they choose to refer clients to a protection expert.
This includes advisers who specialise in high-net-worth business. There is a huge opportunity to help these clients with their protection needs but there are also particular challenges in arranging cover for such individuals.
Arranging protection for clients requiring high levels of cover can be time consuming due to the underwriting involved, which can be tricky for advisers trying to keep these often time-poor clients happy.
Checking what each insurer’s non-medical limits are is therefore important to see which firms might be able to underwrite faster, and splitting cover between insurers to avoid non-medical underwriting requirements can sometimes be prudent.
While costly, this can help deliver better customer experiences, which is why we might see more specialists looking at this model
Some insurers offer dedicated high-net-worth teams to support advisers and speaking to them can be valuable to help navigate the underwriting process and minimise delays.
Royal London’s ‘Underwrite Later’ process has proved popular, where clients can be put on risk immediately for up to six months while they wait for the medical information needed to fully assess the application. There is no minimum sum assured for those applying for business protection or relevant life cover, but for personal cover there is a £1m limit to access this option.
This approach removes some of the barriers that may have historically put both advisers and consumers off protection, and the hope is that more insurers will think creatively to help make it easier for these clients to access cover.
As a result of issues with underwriting, some adviser firms who specialise in supporting high-net-worth individuals have introduced their own in-house underwriting proposition to give them more control of the process and minimise issues.
Working with in-house underwriters means they obtain medical evidence themselves and send this to insurers to confirm terms before an application is submitted. While costly, this approach can help to deliver better customer experiences, which is why we might see more specialists looking at this model.
Relevant life plans, key person and shareholder protection options are all areas where advisers can add real value
While many wealthy individuals will have private medical insurance, added value services such as 24/7 GP offerings available with many protection policies are proving popular given NHS pressures. This is why helping clients to understand the added value services available can be so beneficial.
Many wealthy clients will own their own businesses and advisers have a real opportunity to examine how they can provide clients with advice on their business cover in addition to their personal needs.
Relevant life plans, key person and shareholder protection options are all areas where advisers can add real value to their clients, together with business succession planning which many business owners often overlook.
Advising on employee benefits is a further opportunity, as many business owners will be interested in how they can best support their employees and attract new staff, but may not have considered group schemes before.
Inheritance tax planning and ensuring monies are paid to the intended beneficiaries through setting up trusts is another important part of advising these clients on protection matters.
Protection cover enables advisers to do good while doing well
Once protection has been arranged, undertaking regular client reviews helps make sure the cover remains suitable. Changing circumstances may mean cover needs to change, so by keeping in touch with clients, advisers can remind them of the value of the cover they currently hold and check to see if any changes are required.
This is really important and applies to both personal and business cover. For example, some of these clients may be business owners, who began as a start-up but have seen their business grow quickly, meaning their needs will have changed since that previous advice was given.
Protection cover enables advisers to do good while doing well. For those who look after high-net-worth clients, it may take a bit more effort to secure cover but the opportunities and rewards can more than outweigh the challenges.
Emma Thomson is head of protection development at Sesame Bankhall Group
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