Following three successful events in London, COVER held its fourth protection forum for IFAs in Man...
Following three successful events in London, COVER held its fourth protection forum for IFAs in Manchester. The day's speeches and seminars focused on helping IFAs identify new opportunities and grow their protection business as other areas in the industry come under mounting pressure.
IFAs have been hit hard by the demise of the endowment and are set to lose a further chunk of their income with the introduction of stakeholder earlier this year. Then there is the ongoing threat from the increasing number of direct players in the market ' a threat exacerbated by the new electronic distribution channel.
This seems to imply the IFA's future will be a bleak one, but this need not be the case. Protection remains a largely untapped market and, therefore, there is potential for IFAs to exploit it and replenish income stream. Protection is also an area which cries out for advice, putting IFAs in the perfect position to combat competition from direct players and carve a niche in this area.
Many of the day's speeches reproduced in this supplement reflect the message that protection products ' whether critical illness, income protection or even long term care ' will be a useful weapon to IFAs in this increasingly competitive financial services marketplace. They also focus on how perceived threats to business can actually be turned around to be an advantage.
Roger Edwards from Scottish Provident picked up on this idea, demonstrating how IFAs can fend off competition by working advice back in to the protection sale and offer the client a tailor-made protection package.
The Exchange, meanwhile, looked at the role technology can play in improving the IFA's business process. Managing director Jim Gaskin painted a picture of the IFA office of the future where technology is integrated to provide an end-to-end solution from fact find and quote through to policy servicing and client management.
Sue Wilkinson from Pegasus aimed to change attitudes to critical illness, encouraging IFAs to view it as a form of life long protection rather than a means of mortgage protection. Critical illness, she said, has an important role for older clients, so selling term cover that may not be renewable or affordable later in life could be short-sighted.
Neil McCarthy from Swiss Life spoke of the importance of income protection and told delegates how it should form the foundation of clients' long term financial planning. IFAs usually target younger males and, in particular, those who are self-employed. But, according to McCarthy, other target groups present similar opportunities such as women because they are more likely to be off sick for longer, and home carers that would have to buy in childcare if sickness or disability prevented them from performing these roles.
Matt Rann of Scottish Equitable Protect also reminded delegates of neglected markets. According to the company, less than 90% of businesses have taken steps to protect key people, leaving the business open to significant financial difficulty in the event of illness or death. This provides obvious opportunities for IFAs.
As other income streams continue to suffer, Phil Barton of AXA told delegates how long term care insurance would be increasingly important as the ageing population grows and explained how raising the subject during estate planning discussions could increase the chances of making a sale.
The underlying message of the day was that protection is a booming market and opportunities are there for the taking.