"We now have the crucial evidence that the protection industry is failing to reach wealth advisers in the right way. It is time to rethink the approach to altogether."
- Ian McKenna, CEO and founder of Protection Guru
Over half (57%) of wealth advisers would be more inclined to make protection part of their core proposition if they were able to demonstrate the need for protection to their clients, according to the results of a survey at the first Consumer Duty Alliance (CDA) Protection Forum.
A further 21% said that finding the right resources to help them address protection needs would make them most inclined to do so. Protection Guru, which facilitated the Forum, says this evidences a "failure on behalf of insurers across the protection market to effectively engage with wealth advisers and identifies a need for a fundamentally different approach".
The biggest blockers to engaging with protection named were a lack of necessary training or tools to help wealth advisers give protection advice and the complexity of arranging protection, both cited by 43% of respondents.
Since the introduction of Consumer Duty, the protection market has anticipated significant growth in referrals to protection specialists, yet the results of this poling indicate an overwhelming rejection of this approach with 92% of wealth advisers saying they would want to write protection themselves not refer it to specialists. However, if wealth advisers lack understanding of the need and value protection offers their clients and the products at their disposal, they will not recognise the poor consumer outcomes that can arise from a lack of protection insurance, impacting client outcomes.
Ian McKenna, CEO and founder of Protection Guru, calls on insurers to change their approach, commenting: “These findings demonstrate a clear case for engaging differently with wealth advisers. That may be an uncomfortable pill for some to swallow, but we now have the crucial evidence that the protection industry is failing to reach wealth advisers in the right way. It is time to rethink the approach to altogether.
“We frequently hear wealth advisers say their clients don’t need protection because they are wealthy, but the level of wealth is nothing like the level needed to have no protection need for cover. Every financial plan fails without an income. Taking income from investments to bridge a serious illness can have a significant impact on the level of savings achieved in later life."
