Mortgage News
Brokers surviving on insurance
Protection sales have become a major part of many mortgage broker incomes following the collapse of the mortgage industry, according to new research.
Protection now accounts for 40% of a typical mortgage adviser’s income, while three-quarters view it as ‘very important’ to their business, according to a report by consultancy group NMG.
Mortgage-based income has fallen to just 44% of brokers’ total average income, according to the report, and the higher take-up rates of income protection and critical illness cover have filled the void left by MPPI for many brokers.
In addition, three-quarters of brokers believe sales would increase if more stand alone income products offered an option for unemployment cover.
David Burns, director at NMG, feels that there has been a change in brokers’ thinking from that of two years ago, when the mortgage market was in better shape.
He said: “We don’t sense that this is a one-off. These people are becoming more and more protection type advisers rather than just mortgage brokers. Once they have got into the habit of doing protection, they will stick with it.”
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Roger Edwards, proposition director at Bright Grey, said: “The rise in protection sales has partly been driven by stimulus from the industry, but also because brokers now have less business and more time to sit with a client and discuss their protection options.
“The mortgage market will bounce back, and I hope that brokers will continue to write the same amount of protection and continue the forward impetus. Hopefully, this period has given advisers the confidence to talk about protection in more detail.”