A Mortgage Solutions poll asked: How many of the three main protection policies most commonly used, term life assurance, critical illness (CI) and income protection (IP) do you personally have?
Some 28 per cent of brokers had all three in place for themselves while 27 per cent had two types of insurance. A further 20 per cent had one type of protection while a quarter said they had no insurance at all.
Sincere advising
Richard Campo, managing director of Rose Capital Partners, said: “I believe as advisers, we have to practise what we preach.”
He and all his employees had at least two of the common protection policies themselves, he added.
Campo said: “Once you go through the process yourself, you understand how to relate to a client. So, it’s really important for the adviser to do it themselves as a starting point.”
Rupi Hunjan, CEO and co-founder of Censeo Financial, said all his advisers also had at least two policies on themselves and suggested having personal insurance made brokers more honest when selling.
“If you have it yourself, there’s no question about how sincere you are about it.
If you haven’t got cover and you’re selling it to someone else, then it seems disingenuous. It’ll come out in your body language, in your tone of voice, it’s a bit disingenuous,” he said.
An adviser not having insurance despite selling it to others also raised questions about their credibility, Hunjan said.
He added: “There might be reasons for that but how do you look someone in the eye and tell them they need something when you don’t have it?
“If they have it themselves, they’ll believe in it more themselves. If they don’t it means they have to try too hard to sell it to clients.”
Realities of life
Nik Mair, director at London Mortgage Solutions, said he was not surprised that many brokers had no protection as he said it was probably something which was overlooked.
However, he admitted it was “quite bad” that such a significant number of advisers did not have insurance on themselves.
Campo said he found it “staggering” that a quarter of advisers reported themselves as having no insurance as the job opened his eyes to the fragility of life on a daily basis.
He added: “You don’t have to do the job for very long before you see something bad happen. We had a client die at the end of last year.
“Before she passed, she came into the office in floods of tears, grateful that she had life cover. We hear and see it all day long so it’s strange not to have it yourself.”
Relatability
Having protection can also assist in the advising process and some advisers use their own experiences to highlight the importance of it to clients.
Campo said: “It depends on the client, but I personally do talk about myself a lot. It’s something that comes up naturally, I speak about my two kids and why I have certain cover in place then relate it back to the client. I tell them what I find most appropriate.
“It humanises the process when you talk about yourself.”
Mair does not always raise his own protection policies with clients but said it gave people confidence when he did bring it up during a purchase or remortgage.
Mair said: “What typically happens is when times are hard, we cancel direct debits and payments, and people are more willing to keep a £50 a month phone contract than a £30 a month life cover.
“We have to have those conversations to say why it’s important.”
