In recent years, the income protection market has seen long-overdue growth – a hugely positive step towards a more financially resilient population. Yet, the journey doesn’t end once a client’s policy is in place. True value comes not just from putting protection on risk, but from ensuring it remains relevant, effective, and aligned with a client’s evolving life.
In this exclusive article, Jo Miller, Managing Director of IPTF, explores why regular reviews are not simply best practice but a vital part of fulfilling consumer duty – protecting clients, strengthening relationships, and delivering better long-term outcomes.
IPTF exists to raise awareness and understanding of income protection as a means of securing financial resilience for clients and ultimately of building a population more equipped to deal with income shocks. We believe that good advice conversations will start by identifying a client’s needs and their goals and educating them as to where they may have vulnerabilities and what can be done to safeguard their plans. For many, income will be fundamental to ensuring that they reach their goals and are in a position to make choices about their lifestyle and income protection will provide a way of providing certainty.
In recent years we’ve seen long overdue growth in the income protection market which is great to see in the context of working towards a more resilient population but the story shouldn’t end once a client is on risk.
Naturally anyone purchasing any type of protection policy hopes that they will never need to use it and many will think nothing of almost forgetting the cover is in place as life continues. But although this is an understandable scenario, all being well, there is a huge risk that the original purchase remains forgotten and on original terms, while life moves on, circumstances change, sometimes dramatically, and cover becomes gradually more outdated.
Once upon a time we might have surmised that in this situation the risk belonged to the client alone in the event that they needed to claim but in this era of consumer duty where advisers are expected to fulfil more than a one-time recommendation, the risk Is very obviously shared. Regularly reviewing a client’s cover isn’t merely good service—it’s a regulatory, ethical, and commercial imperative.
Regularly reviewing income protection policies ensures that they continue to provide appropriate cover and support despite changing circumstances. Furthermore, they send a clear message to the regulator about commitment to good outcomes for clients and support beyond the initial recommendation and sale.
Such reviews also allow advisers to provide tangible evidence that they are upholding ongoing suitability obligations from a compliance perspective and acting in the client’s best interests.
Furthermore, regular reviews help to build trust with a client demonstrating genuine care and a proactive approach to stay in touch with developments such as salary reviews, new jobs, expanding and changing family commitments and evolving living situations. The impact of these reviews and regular touch points is clear with clients who feel looked after being less likely to lapse policies or seek alternative sources of advice. Importantly though, these reviews also provide opportunities to improve a client’s cover, remind them of the value of their policy and open up the chance to have broader protection conversations.
The first step is to recognise the importance of regularly reviewing cover for clients but to do this effectively, it’s important to consider the sorts of triggers that might make such reviews necessary. These will vary for individual clients, but common triggers can include career and income changes such as promotions, a salary increase or becoming self-employed, new financial responsibilities such as taking on a mortgage or increased borrowing which may impact the income needed to maintain stability as a result of an income shock and changes in family circumstances including marriage divorce or the arrival of children.
Advisers should also consider changes in clients health or lifestyle such as clients revealing that they have managed to stop smoking, those who have lost weight or any who have unfortunately experienced new medical conditions.
Where existing cover has been arranged to complement cover provided by employers, it will be essential to ensure that these benefits are still in place and haven’t been updated or withdrawn. Necessarily it will also be important to account for inflationary changes since the cover was put in place and to consider market improvements which could benefit clients.
It would be very easy to regard reviews as yet another thing to do, but it is important that advisers undertake these meetings with a mindset that will encourage successful outcomes for them and their clients. Approached in the right way, and for the right reasons, these reviews can build trust and loyalty, encourage understanding and lead to improved outcomes for clients. They are also an opportunity to remind clients about the additional benefits that are included with their cover and encourage engagement with the product.
Regular reviews are the foundation of high-quality financial advice, ensuring that should a client need to make a claim, their cover is appropriate and more than adequate to support them through uncertain times. It’s imperative that advisers build reviews into their advice process as consistency is key and while the reviews demonstrate a commitment to consumer duty, they also have commercial benefits including improved retention and deeper engagement. Most importantly they allow an adviser to stand out for the most important reason: ensuring the best client outcomes.
