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Successful brokers package mortgage and protection together for affordability – L&G
Some advisers avoid discussing protection because they are worried their clients may not be able to afford it, Richard Kateley, head of intermediary development at Legal & General has said.
Speaking on the Accord Growth Series Podcast, Kately (pictured) said it worried him that this was a concern among some brokers as it threw into question a client’s ability to afford the mortgage they were being offered.
He said: “If a client says to you, I can’t afford that £20 life insurance to go with a mortgage because we’re strapped for cash, can they afford the mortgage?
“Because if interest rates move by even a fraction, their mortgage will go up by more than £20.”
He went on to say the “most successful” brokers did not separate the mortgage and protection, they packaged them together, ensuring both were affordable within the client’s monthly budget.
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Kateley recommended getting a client to consider any scenarios where they may no longer be able to keep up their repayments as a way of engaging them into the real risks of not having any insurance policies in place.
All part of the job
He also said he believed some brokers felt it was not their job and instead saw protection as “additional work” and “long winded”.
Kateley said: “If I go to see a mortgage broker and talk about taking out the biggest debt I’m ever going to have and they don’t talk to me about protecting my income – which let’s face it I can’t have a mortgage without an income – I don’t think they’re doing their job correctly.”
“The old adage is protection is sold not bought; it’s very true you have to talk to a client for them to buy into it,” he added.
Jeremy Duncombe, director of intermediary distribution at Accord Mortgages, said: “We know it’s often seen as an extra, but as Richard highlights, by incorporating protection into your advice process and using some simple sales techniques, it can easily become a much easier and profitable conversation, while ensuring the best customer outcome.”
“Knowing your client has a mortgage they can afford and the security of assistance if their circumstances change has to be an indicator of a job well done for any adviser,” Duncombe added.