Putting Protection Viewpoint insights into action - part 2

Welcome back to Money Talks, where I’m joined by Stacy Penn, Head of Policy at AMI — the Association of Mortgage Intermediaries — and Shelley Read, Senior Protection Technical Manager at Royal London.

In Part 1, we explored the protection opportunities for advisers when it comes to renters, and the role referrals can play in widening access to protection advice.

In this episode, we’re turning to another key insight from the AMI Protection Viewpoint research — the importance of timing and positioning the protection conversation, and why introducing protection earlier in the mortgage journey can make such a difference, either directly or through referral.

So Stacy, how can advisers start to embed protection conversations more naturally as part of the mortgage process?

Yeah, so there's a really fascinating stat that we re-looked at in last year's Viewpoint. We first asked it in 2020, which was the first year of the study, where we looked at the gap between the percentage of consumers that recall a protection conversation initiated by their mortgage adviser versus the percentage of advisers that say they initiate that conversation. And we found a gap. And that gap still exists. In 2020, we found only 36% of consumers could recall that mortgage adviser-initiated conversation. When we looked at it last year, 39%. So, some small progress there. But I think what it says is that conversations aren't always sticking in the way that we like or hope they will.

I think a few things that we could look at, particularly from an adviser perspective, is language. I think it's come up already in our conversation today, but language is a key part in that conditioning. Really cementing your role to that customer. So I'm here to help support you from an insurance perspective. I'm going to help you buy this property, but also protect your home, income and your family. It's a very different conversation. It opens up potential for that conversation. And perhaps there is this angle on resilience as well, using some of that language. Things like many people feel they're quite resilient, or more resilient, than they actually are. So I'm going to help support you exploring the safety nets you might already have. But where are some of those gaps in that and how we can strengthen that? So I think if that can happen more, perhaps those conversations might stick and we might see that gap between those two stats reduce.

Yeah, I think one of the other things that I think is a real gift as far as a segue into having that protection conversation is if you, well, we all know if we're in the mortgage area that on most of the documents, including the mortgage offer,
there is this sort of disclaimer that says, we all know it, your home is at risk if you do not keep up repayments on a mortgage or loan secured against it, etc, etc. I hope I've got that wording right there, but I think we all know what I'm referring to. But I think that is a real gift because it opens the conversation to say, we've said your home is at risk, you know, most people are excited to be buying their first home or moving up to a bigger property. I think it just opens that conversation to say, actually, what are those risks? What could mean that you couldn't keep up those mortgage repayments? And most people are going to talk about someone dying prematurely or someone getting ill or having an accident. And that's a real opportunity, I think, to talk about the solutions that as an adviser you can actually provide for them.

Yeah, I think there is opportunity again in that area to review. At AMI, we've been playing an active role in the discussions that are taking place across the industry because the FCA has been very clear that if we are to really tackle this protection gap, it involves all of us coming together and collaborating, which I think Viewpoint is testament to that over the years in terms of the focus and some of the call to actions that have come out of that. The one I wanted to draw on was the FCA has said that there is a role potentially for nudges and consumer prompts. So something we've been feeding into the FCA is where we think there are areas that nudges and prompts could be strengthened along the mortgage and home buying process to help consumers think about protection. So Shelley had already mentioned that almost kind of warning statement around your home may be repossessed. One idea we've had is, could that actually be bolstered and extended so that it says what it says already? Also this bit on the end, like you may wish to consider your protection needs. Just small little nudges like that along the journey that could make a difference or help prompt that conversation. So that's something that we're continuing to feed into.

I think over the years, sometimes fact finds can evolve with different parts kind of added on rather than integrated into one. So I think there is a chance for homeowners and advisers to look through this and see how can you embed some of the protection questions into what you're asking about the mortgage, so they're not seen as separate, they're not seen as an add-on from that consumer perspective. So I think that helps position the discussion, and again helps that consumer to start almost self-identifying that they may have a need.

Yeah, I think just time and time again, we come back to the fact that positioning it up front and making it an integral part of that mortgage process, that it's not something to be thought about later or as an add-on.

Yes, that is a brilliant point, actually, Shelley. You've just reminded me of another key point of our research was we'd asked consumers when they would like protection conversations to be as part of that mortgage advice journey. And over half said that they want that conversation at the start or during that mortgage process. So I think that's just really, really encouraging and really reinforces that if advisers are thinking about how they're positioning this earlier on in the process, that is likely to be very much welcomed by their customers.

I think maybe one of the other things to consider is we've talked a lot about language today and I think maybe many of us in the protection space have got used to saying to our customers, you know, what would happen if, what would happen if you died prematurely? What would happen if you got diagnosed with cancer?
What would happen if you had a heart attack? So maybe just turning it round a bit to say, what would you like to happen? You know, someone, if one of you died prematurely, if one of you sadly had a cancer diagnosis, not what would happen, but what would you like to happen? Most people are going to say, I think that they'd like to have that mortgage paid off. They'd like to have some monthly income to be able to, you know, keep up a lifestyle. And once they've told you what they want to happen, then maybe asking what they have in place that would make that actually happen. What have they actually got in place? It opens that door again to say, well, I can provide a solution to make sure what you want to happen can actually take place.

Yeah, I think that's a part of the shifting the language from it being fear mongering, perhaps, to something that's a bit more hopeful and feeling like you're in control and planning for that future.

Most definitely. I always find it amazing that we don't seem very good at sort of highlighting and shouting about our expertise, do we? I think other professionals are much better than we are. And I think the other area that we don't talk enough about is reminding clients that if something terrible does happen, that you're going to be there to support them with a claim. You're going to have, you know, great relationships with the providers and you can, you know, sort of hold their hand and help them through that.

Yeah, I think that value of advice and that human connection piece, Shelley, is really important and something I just did want to draw out from our research last year. It was a new kind of angle that we'd not done before was we'd asked people how much they value that human connection piece as part of buying protection. And it was around 70% that said human connection is important.

And we did also ask some questions around AI where some consumers see it has its use. It talks more in the research stage, but only 27% of people trusted it, would trust AI to make a financial decision when it comes to protection. So I think it just continues to highlight, like you say, Shelley, that important role in that consumers do value the great work that advisers do.

Yeah, and I think, you know, all providers, I can only speak from the Royal London perspective, but we are committed to helping advisers to have those real robust protection conversations. So, you know, if protection is something that you need some more help on, please contact us as providers because we can offer, you know, invaluable support and coaching to make sure that we're having all of those protection conversations that you know, your clients need to avoid that foreseeable harm that we all have in our minds when we've got protection on the agenda.

Yeah. Well, thank you both, Shelley and Stacy, for joining me in today's episode. I think this was a very enlightening episode, and I hope to catch up with you both in a year's time to see what changes might have come.

Yeah, look forward to it. Thanks so much.

Thank you.