The mortgage market's return to strength can only be a good thing for mortgage advisers, but it already appears to be having a damaging effect on the protection industry.
Figures within the protection sector say that sales of income protection, life cover and other forms of insurance through mortgage brokers have fallen this year as overstretched advisers have refocused their concentration on mortgages.
Major players such as Legal & General and Aviva have reported slow protection sales for the first half of the year. The EU gender directive played its part with brokers desperate to clear pipeline business before the December deadline in 2012.
However, the drop off from mortgage advisers could have a longer lasting impact. Chris Bramham, director of estate agency and financial advice firm Kings Group, argues that mortgages are typically taking longer to process and advisers are struggling to find time to complete protection sales alongside the home loan.
"One of the issues we've had in the last 12 months is that we've started to see mortgage business come back," he says. "As a result, the protection sales have been slipping. Mortgages are also taking much longer to place now, which leaves far less time for the protection sale."
Brokers are likely to give more attention to protection in the winter months as the mortgage market hits its traditional yearly lull, but things could quickly get worse at the start of 2014.
There are fears of a double whammy effect from the launch of the Help to Buy mortgage guarantee scheme in January just as lenders' direct channels are entering a state of flux with the Mortgage Market Review implementation due.
The intermediary channel will be expected to pick up the slack and this will put brokers under even more pressure to favour the mortgage sale over protection.
Bramham adds that price comparison sites continue to gain market share, making it more difficult for brokers to make their case to consumers and justify the amount of time spent on cover.
"The industry has lost sight of what to do with protection. There's been a cultural shift away from seeing the need to protect yourself and your family.
"Plus, the huge competition from firms like Moneysupermarket and Compare the Market, which only offer products from 10 to 15% of the market, leaves brokers with just 50% market penetration."
"There's no doubt there is a need for protection, but whether there's a want from the customers and a desire from the broker is another thing."
Louise Colley, distribution director of protection at Aviva, agreed that many brokers had been too busy to keep up the level of protection cases they had previously completed.
"Advisers' challenges have been that there's been an upturn in mortgage activity, which is fantastic news for the mortgage market, but the protection sale adds an extra 45 minutes on to what they already do," says Colley.
She adds brokers need to know when to introduce protection into a conversation with clients. In most cases once a client goes out of the door the opportunity for a sale has been missed and advisers unlikely to have the time to mine their existing clients during busy periods anyway.
Mortgages will always be seen as the bread and butter for brokers and as the market continues to grow the side effects for the protection industry look set to get worse.
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