Amid falling protection sales and a growing protection gap, Pink and Aviva have teamed up to provide a protection training academy for mortgage advisers and people new to the industry. Mark Graves explains why.
It has been incredibly hard for a lot of mortgage advisers to make the switch between selling mortgages with a bit of life cover to selling a full suite of protection products.
So, there is an overwhelming need to provide mortgage advisers with in-depth training on how to sell a wider range of protection products to ensure it is not just the mortgage debt that is being protected, as is so commonly the case.
The only way to plug the gap that currently exists is to help advisers fully understand what they are selling and why they are selling it, in a fundamental way not really taught for more than 15 years. So, what happened to the protection sellers?
For many years the market has talked about the growing protection gap between those who need protection and those who actually have the cover in place to provide for them and their family, should an unforeseen event befall them.
Back in the 1980s, the life companies provided comprehensive training for their sales teams and IFAs alike, however this stopped in the late 1990s.
But the real drop-off in life and protection sales came with the introduction of procuration fees for mortgages; before then financial advisers only advised on mortgages in order to make the protection sales on the back of them.
When advisers could suddenly make money out of mortgages alone, the focus on protection dropped off, as mortgages became the easier sell. As a result, it was the lenders who started recruiting the business development managers to woo advisers.
The protection providers headed in the other direction and many stopped their direct sales training teams and simply became manufacturers. Now, things are passing through a full circle, as many mortgage advisers have spent years selling mortgages alone with the only protection being the life assurance the client needed to get the mortgage.
As a result advisers either lost much of the ability to sell protection, or, being newish to the market, have never trained to sell it in the first place. As a result there is now an overwhelming need for protection training and almost nobody providing it.
One of the biggest challenges for sales teams is being led by someone who does not understand that selling a protection policy is completely different to selling a mortgage.