To this end, a recent analysis of advisers by a client management system provider threw up some interesting results which enables those contemplating branching out to add some hard facts into their thought processes.
The findings established that advisers are missing out on more than £22,000 of potential protection business from existing clients. This figure includes ‘missed’ income from critical illness, life cover, family income benefit and income protection, and works on the assumption of a 20% penetration rate, an average commission rate of 150% and an average premium of £50.
If you consider that the best advisers will be hoping to sell cover to more than one-in-five of their clients and that premiums can often exceed the base figure used, then it is fair to say that top brokers can earn comfortably in excess of the amount quoted.
Some brokers have failed to capitalise on complementary income streams simply because they do not wish to deviate from their core business, but more often than not they are missing out because they don’t keep in regular contact with clients to stay updated on their requirements or because they don’t know how to make the initial suggestion.
Events such as the upcoming implementation of the EU Gender Directive give advisers the perfect opportunity to display good service by communicating the changes to their clients and seeing if there is anything they can do to assist.
When the mortgage market was as its peak, some intermediaries would have been able to dismiss the potential extra earnings from insurance products as it wouldn’t have represented a significant boost to their income, but that is less likely to be the case in the current climate.
An extra £20,000 on top of an existing salary is not to be sniffed at and having this figure so emphatically spelled out may convince more intermediaries sticking steadfastly to mortgage business to take the plunge into other product areas.
Richard Adams is managing director of Stonebridge Group
