Business protection: Not enough advisers have made the most of this market
FAs need to gain a better understanding of businesses and take time to build stronger relationships with corporate clients if the business protection market is to reach its full potential.
This was the conclusion of the latest Cover Think Tank, which debated how the market could increase advice-driven business protection sales.
Guests at the industry roundtable, sponsored by Scottish Provident, aired their concerns over the small number of advisers currently specialising in this market.
Chris Boatman, senior underwriter at RGA UK, commented that there was a lack of understanding among advisers of clients' needs.
"One reason we do not sell as much as we could do is that we do not know enough about the issues facing these clients. It is about knowing enough about business issues and understanding the client's business," he said.
Shying away from the complexities of legal issues surrounding corporate sales was also cited as a reason why advisers have not embraced the market.
"IFAs are afraid of business owners, of getting the board of directors together and telling them what they need to do. It comes down to the legal framework," said Andrew Valentine, head of Millfield Business Solutions.
Valentine said too many advisers lacked confidence in this market. "If you enter the SME market you have to get them to buy in. You have to make them understand why they are taking the policy out and the long-term effects of that decision. You have to go to the board, chair the meeting and drive the decision through. Many IFAs shy away from it," he said.
Nick Kirwan, head of product development at Scottish Provident, argued advisers were in the best position to advise businesses and there was support available to help them to get to grips with more complex issues. "I think it is an area where the IFA has an advantage because they are small businesses after all. If they don't understand it, who does?
"As far as legal structure is concerned, help is at hand. We're not alone in offering technical help desks," he said.
However, Brian Kerry, branch director at Towry Law, said it was unlikely more advisers would embrace the market.
"I do not think that IFAs will change. It will be the province of specialists. It will be the larger organisations. Advisers will look to easier products," he said.
