Looking at most broker’s business cards, they typically say “mortgage and protection adviser” on them. It got me wondering whether protection has the same prominence for the clients coming for advice?
Given that the word protection takes up proportionately more room on the card, it would be interesting to discover how many advisers dedicate proportionately more time to talking about protection than they do about mortgages? I suspect it is few.
It still seems bizarre that tied life assurance was abolished and as a result we can saddle someone with hundreds of thousands of pounds worth of debt and not have to protect them against what might happen if they lose their job or get sick.
Just because the legal compulsion went, doesn’t mean that the moral responsibility did.
The key might be in the word adviser.
Duty to give advice
When providing advice is that person an adviser or just a mortgage broker who brokers a deal between the client and the lender?
Every qualified adviser surely has a duty to ensure that their clients receive advice.
Playing devil’s advocate, can someone actually say they have provided advice if they have only arranged a mortgage and not talked about how someone can protect their payments if things do not go to plan?
One of the greatest feelings is seeing the joy on someone’s face when they first pick up the keys to their new house.
It is clear at that moment how much the new home means to those people, so how irresponsible is it not to leave that client in a position where they may lose their much-loved home should something go wrong?
A big worry is the rise of the robo-adviser.
Impossible conversation
There really is no advice in this scenario, just a range of questions and algorithms picking different solutions.
Of course, technology has its place and there will always be people who choose this route, but a set of algorithms is never going to be able to provide advice.
As a result, it is also never going to be able to ensure that someone is fully protected.
Every adviser knows that protection is rarely actively bought, but needs to be proactively sold. This means waking someone up to the events that may befall them in their lives and making them aware of the need.
The fact that this is a difficult conversation is so often a contributory factor to why so many brokers do not prioritise it – and it is one that it is nigh on impossible for a computer to have.
Anything that detracts from this conversation about protection taking place has to result in worse consumer outcomes. This surely flies in the face of everything the Financial Conduct Authority (FCA) has tried to achieve with the Mortgage Market Review (MMR) and everything that every responsible adviser wants for their clients.
