IFAM: How can Protection Guru help advisers and paraplanners deliver more effective services to their clients?
AH: I think one of the key reasons that advisers who specialise in wealth management or mortgages don’t do as much protection as they might is because protection can seem complex. There’s a wide range of products across the market, all varying in complexity. That’s not to mention the difficulties some may face, particularly during the pandemic and getting policies on risk in the first place, especially if you’ve got clients who have health problems.
Protection guru aims to arm the adviser with the knowledge they need in order to be able to demystify protection and hopefully make it easier for them to feel more comfortable talking about protection with clients.
We do that by breaking down the different features when they might be appropriate for certain clients, exactly why they might be appropriate for those clients and how that might differ across the market. We aim help build an adviser’s confidence around protection and better understanding the product sets so that they can have more engaged client discussions and talk about more than just price.
For a long time, protection was sold predominantly on price. In some segments it still is. In our view that’s not the right way to go because cheaper products, by their nature, will be less comprehensive. There are some exceptions to that where some plans are competitively priced, but generally speaking, cheaper plans will be cheaper because they are not offering the same level of cover as more expensive plans. By helping advisers better understand what the features do, they can take a more informed decision about whether their clients would benefit from those and be able to compare the market easier around more than just price.
IFAM: It seems as though a lot has changed in the last few years, are you seeing a lot more features coming in, different ones?
AH: We absolutely are. Protection has evolved massively over the last five years. If we look at protection five years ago, it was a product that was built to protect a client financially; to protect their family if they die or contract a critical illness, or to protect their finances if they get ill and are unable to work. Of course, that still is at the core of the plans and absolutely has to be.
However, the protection market has moved on. It has started to offer more features to help the client with their health, their mental well-being and to support the clients through physical ailments that they might have. This is done through what the market calls ‘added value benefits’. We now see added features such as the ability to be able to access counselling or the ability to access a second medical opinion for example.
Plans now give access to virtual GPs. This has been particularly popular during the covid pandemic given all of the problems people have had in actually going out and physically seeing their GP.
The market has moved on massively in that not only are plans protecting clients financially and making them more resilient, but it’s also providing services to help them reduce the risk of becoming significantly ill. There are services that can help them keep fit, keep active and stay mentally strong.
Critical illness has also changed a lot in the last 5 years. There’s a lot of competition in the market to be the most comprehensive. And in more recent times, a lot of plans are looking to simplify the way they cover conditions and their definitions. This has been a really positive change for the protection market. The definitions offered were often quite complex and very focused with long lists of conditions that, frankly, most clients would never read anyway.
The market has taken an active step towards simplifying that list whilst not lessening cover. For example, amalgamating definitions where there are two conditions that are very similar and one definition would be able to cover both conditions and also taking a more impact based approach to critical illness.
AIG led the market when they came out with their recent enhancement. They are more focused on the impact of the condition and covering people based on their actual symptoms and what they’re suffering from, rather than covering a set condition. That’s a really positive move and helps simplify things for both the adviser and client whilst at the same time broadening the cover.
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