"Financial advisers have the ability to play a key role in helping people through this crisis using one very simple, yet under-used technique – conversation."
According to the Office for National Statistics, 27% of UK businesses have reduced staff levels. Many people are struggling with confusing and fast-changing coronavirus guidance, such as mortgage payment holidays, support for freelancers, and furlough rules announced by the Government.
Finance-based anxieties bring with them new health issues; money worries and poor mental health and each can cause or worsen the other. We know that the circumstances are challenging for advisers too. Many are self-employed business owners, now working hard to run their businesses from home and support customers as best they can during a time of huge financial turbulence. Yet financial advisers have the ability to play a key role in helping people through this crisis using one very simple, yet under-used technique – conversation.
As the crisis drives people to examine their financial situation, and some have more spare time than usual, they begin thinking about reviewing their outgoings to save money. They might consider cancelling insurance policies, or turning to comparison sites to try and find cheaper deals, leaving them vulnerable if they cancel policies they need, or buy new policies that don’t meet their needs. Without professional advice, they may not understand the detail of a policy, such as eligibility criteria, choosing an appropriate excess figure, and how to avoid being stung by compulsory excesses. Brokers need to be talking to clients about whether products meet their needs, advising them not to make hasty, risky decisions, and demonstrating why cheaper isn’t always better. For example, many home insurance policies don’t cover common events as standard like broken or blocked sewage pipes, or damage caused by having to trace and access a problem such as a water leak.
Conversations about general insurance are often overlooked but have never been more vital. With lockdown rules meaning the public are spending more time at home, there’s a good chance of things going wrong or accidents occurring. Therefore, having the right level of home insurance in place is more important than ever, including extras such as accidental damage cover and home emergency cover. Advisers are ideally placed to help clients understand the benefits of a quality policy and optional extras and make sure they are properly protected. If a client hasn’t reviewed their insurance cover recently, advisers may be able to help them find cover that better suits their needs.
Indeed, there has never been a better time for advisers to proactively reach out to clients and offer support and guidance. As financial experts, they can help by providing a review of the client’s financial situation. This conversation is an opportunity to remind clients of the benefits of existing financial products, highlight ways of improving the financial situation, and showcase where advisers can provide additional support. Talking through policies will help clients understand whether they are still fit for purpose, or if they need updating to account for changed circumstances such as more children or new valuables.
As much of the housing market remains in limbo, advisers should take the opportunity to talk to past mortgage clients, offering to help with their remortgage or product transfer arrangements. Even though some lenders have temporarily paused remortgages, starting the conversation now is a good idea to help build a pipeline for when things start to go back to normal.
Talking about remortgage needs also provides an opportunity to chat about the client’s existing general insurance. Speaking to the customers that advisers haven’t previously sold GI to provides another opportunity to help and could lead to a wider review of their financial situation and even recommendations to family and friends.
All kinds of conversations, not just financial, have become vital support mechanisms in recent months. The 11th of May 2020 kicks off National Conversation Week, an annual awareness campaign proudly supported by Paymentshield. This year, we’ve helped to bring together th financial research experts Defaqto and mental health charity Mind to show how the power of conversation can support us through tough times. With face-to-face chats now impossible, we’re calling on advisers to start harnessing the potential of talking via phone, video call, or even social media, to reach out to their clients and help improve the public’s financial and overall wellbeing – which in turn will support the industry through this challenging year.
