Advisers have a duty to conduct regular reviews with protection clients to assess the suitability of their policy and strengthen their relationship, advisers have said.
Mortgage Solutions spoke with mortgage and protection advisers to see how often they kept in touch with clients and whether there were any challenges with policy cancellations.
This comes after the Financial Conduct Authority (FCA) raised concerns about protection advice and said while many advisers had a system of conducting annual check-ins, some were “missing details on the triggers to identify the need for more regular review”.
Touching base regularly
Shirley Gooden said she set an expectation with clients to have an annual review and immediately booked them in for one a year after their policy started.
She added: “My clients agree they wouldn’t remember to update me of changes, so a call is always welcomed. Also, if the client is a smoker or overweight and their circumstances change, they may now receive favourable rates.
“If I’ve arranged the clients’ plans correctly, only a major change in circumstances would instigate increases in their cover. If so, the client understands the rationale behind it, and is prepared to make changes.”
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John Phillips, CEO of Just Mortgages and Spicerhaart, said the firm placed “a lot of importance on protecting our clients by holding annual reviews of both their mortgage and protection policies”.
He added: “These reviews are an essential part of our service, ensuring our clients’ coverage remains aligned with their evolving needs.”
David Stirling, independent financial adviser at Mint Mortgages and Protection, said when first arranging protection for a client, he tended to make sure it would be fit for purpose for at least 2-5 years.
“This is also dependent on what the protection for – so mortgage protection could be for 20-30 years, family protection for 18 years and so forth,” he added.
Stirling said his firm touched base with clients regularly to “check if they have started a family, changed jobs, anything pertinent that may need an alteration or a change of structure in the way their insurance is set up”.
He continued: “This can occur at any time, though, so planning must have some element of fluidity and flexibility to allow for changes, especially health changes in one person of a couple.”
Phillips said there was sometimes a challenge in securing initial client engagement, but this seemed to improve once a schedule was agreed. He added: “While the initial response rate can be moderate, once clients commit to a review, they are generally very engaged.”
“This engagement allows our advisers to conduct a thorough review, ensuring the protection policies continue to provide the necessary coverage. The key hurdle is often just getting the client to take that first step toward a review.
“Yet, those who do tend to recognise the value and importance of their protection policies and are keen to maintain them,” Phillips said.
Phillips said VouchedFor feedback was a “key tool” for the firm’s brokers as it gave them a chance to identify opportunities to contact a client.
He added: “Where clients have expressed an interest in further support, brokers can engage and organise a review.”
Retaining clients and keeping them involved
The advisers said keeping clients engaged and explaining the benefits of protection properly lessened the possibility of them cancelling a policy.
Stirling said: “If a client feels involved in the advice process, understands what each product they are buying into does and feels that they are good value for money, then lapsed plans should occur rarely.
“It is the job of the adviser to educate, explain and probe for needs, priorities and solutions.”
Gooden supported this view, saying she “rarely had this issue” of clients wanting to cancel a policy because they “understand the value of their cover from the outset”.
She said reviews helped with this, describing them as a “great way to emphasise why they have cover including access to any complimentary benefits”.
Gooden added: “It means my clients remember me and remain engaged thus less likely to consider cancelling. Zero contact will damage rapport, meaning clients are likely to become disengaged with you.
“Then there is a danger another adviser will take them, or they may forget why they wanted the cover in the first place.”
Phillips also said it was “uncommon” for the firm’s clients to want to cancel their policies during regular reviews.
He said: “Our advisers are trained to clearly explain the purpose and benefits of each policy as part of our sales process, which helps reinforce the value of maintaining or adapting their coverage as their family or needs change.
“Through the course of a conversation around why they took out the policy and why it’s still relevant, they are far less likely to cancel.”
Championing protection
Where a client might be thinking of stopping their cover, Gooden said she made it clear to them that they were “potentially cancelling a priority bill,” saying that “without this cover, their priority bills are at risk”.
“Some providers can stall payments temporarily if they are struggling. I also remind clients of any waiver of premium benefit they may have. Finally, I make it clear if they want cover again in the future, there is no guarantee they’ll be accepted.
“Changes in circumstances can affect their chances of re-applying,” Gooden added.
At Just Mortgages, Phillips said: “If a client does consider cancelling, our approach is to reiterate the fundamental reasons why the policy is crucial for their financial security. By highlighting the original purpose of the policy – be it for life cover, income protection, or critical illness – we help clients see that these protections are not just a product, [but] a vital part of their long-term financial planning.
“This clear communication often dispels any doubts and encourages clients to retain their policies.”
