Being honest with someone and having their best interests at heart, however hard the message, is key to building trust in any relationship.
So how does this 'tough love' translate to the world of financial advice?
In the early days of your client relationship you'll be getting to know them, establishing and prioritising their needs and finding out what they can afford. Once you've arranged their mortgage, you might be worried that they'll see protection as an unnecessary add-on.
You could also be wary of taking up too much of their time (and yours) talking about the different risks and range of covers available. And for those that you do get across to, you may hear common objections like 'I don't want protection', 'I don't need it', 'I just can't afford it' or 'Do they all do the same job?'
While your client might firmly believe their convictions when they go into a meeting with you, you'd be surprised how quickly you can turn this attitude around. Only an adviser can point out the substantial differences between products. And put simply, clients need advice to help them understand the risks and best protection for their needs.
A recent YouGov report reveals that just 40% of people are covered by life insurance.1 Critical illness and income protection are even further down the shopping list which is a bit back to front considering the risks of being critically ill or unable to work due to illness are much, much higher. In fact, in our own research we found that 52% of mortgage holders don't have a plan in place to cover repayments if they fall too ill to earn for 3 months or more. 2
There are different ways to bring protection into the client conversation when you see there's a need not being addressed. Have they considered how illness would impact their life? Or the minimum amount they would need every month to protect their standard of living? What would their life look like if they didn't have that? And, how would they pay their regular bills if they're not earning?
Having a frank conversation upfront could make sure your client gets the right outcome when they really need it and save you from serious repercussions down the line. It also lets them know what they can expect from your relationship.
But once you've struck up that initial relationship you still need to work at it. Of the 40% of people who have life insurance, over 20% have always had the same policy.3 As an adviser you want to make sure your client's policy is fit for purpose and flexible over the long term. By offering a regular financial review you'll reassure your clients that you care about their personal needs. After all, our lives don't stay the same for long and our protection plans should reflect any changes.
Getting married, moving house or having a baby are just some of the reasons why your client's existing protection plan may need reviewed. Without your advice they may not realise the risk they and their family are facing by not having the right protection in place.
Keeping in touch with clients and inviting them for regular reviews, means they'll not only be reminded of the value of your advice but it will show them you're in it for the long haul.
Why not use our sample client communications to help with this?
1. Life and Health Protection 2015, YouGov
2. Royal London, January 2015
3. Life and Health Protection 2015, YouGov