What approach do you take to financial planning for your clients? Like many of us, do you stick to what you know and focus on mortgages when times are good and only look at additional income streams during tougher times?
As rates continue to fall post MMR, mortgage appointments should be keeping your diary full and it’s all too easy to move onto the next sale without fully reviewing each client’s finances.
According to the Association of Mortgage Intermediaries, the number of brokers has fallen by half since 2008
With the roller coaster cycles of the housing market in mind, I think it’s prudent to take a holistic approach to financial planning for your customers, no matter what the weather. It’s easy to focus on mortgages in periods of growth such as these, but it leaves your business at risk when that growth period inevitably ends.
I believe that the way forward is to be proactive; to spend longer on each client, particularly to advise them on the need for protection. If you don’t, your client may fall into the hands of a comparison site and purchase an inappropriate product, or even worse they may not take out any protection at all. Another issue with comparison sites is that once they have your client’s details, they will relentlessly pursue them for all types of business, putting your business relationship at risk.
5.2 million mortgage holders have no protection against loss of earnings and we have to ask ourselves whether we are doing all we can to educate our clients and help them make an informed choice on their finances.
The seven families campaign is proving successful at raising awareness of the need for income protection but we can certainly do more. The perfect time to talk about protection is during the mortgage sales process. All it takes is a simple statement followed by a question to the client to open up the discussion; “If you don’t keep up repayments, you risk having your home repossessed. So how would you cope with mortgage repayments if you lost your job?” If they don’t know, then they clearly need income protection.
The purchase of a new property is also the perfect time to look at their life protection and buildings and contents insurance. It may be a bit more work in the short term, but you can make sure that your client has the best deal on their protection needs and the extra renewals will show their real worth when that downturn eventually shows up.
With sourcing systems such as The Source and Uinsure, you can have a quote and all the necessary compliance documents ready in less than half an hour. These sites not only compare the products based on price, but also on quality, so you can be sure that your client has the cover that they actually need.
Also, with systems such as iPipeline’s AssureWeb, you can compare multi-benefit discounts on offer from some providers. It may be better to shop around, but it is worth comparing the possible savings available from having multiple products from a single provider.
So the key message here is to make hay while the sun shines – offer your clients a holistic financial planning service and recession-proof your business in the process.
Martin Wilson is the joint MD of The Right Mortgage and Protection Network. Offering a refreshing approach to financial services in which advisers and their customers are valued, they have a partnerships offering for mortgage and protection advisers and would like to help you grow your business. To find out more visit www.therightnetwork.co.uk or email martin.wilson@therightmortgage.co.uk
Sources [1] FT Adviser 29th May 2013
This article was originally produced for Mortgage Introducer and can be found here.
