"It can be increasingly hard for advisers to factor in every available option to their clients, and how each service interacts or impacts other financial services."
As these measures help catalyse millennials' transition from 'Generation Rent' to 'Generation Buy', these new customers bring new needs and expectations with them. In particular an interest in protection, with a recent study from LV= revealing that more than 8 million 22-44 year-olds have considered income protection in the last three months. As the understanding of the value of protection grows in response to the coronavirus pandemic, 40% of 25-44 year-olds with no life cover are now considering life assurance, with an increase in demand for fair, transparent advice.
With such a spike in interest among younger buyers, protection is becoming a vital factor to consider when taking out a mortgage, so it should be a top priority for advisers.
1. Millennial clients won’t stand for the protection advice gap
Currently, our research has shown that 50% of all UK mortgages have no protection insurance backing them in at all. In part this protection gap exists due to an advice gap – buyers entering the mortgage market simply don’t know what kind of protection insurance they need or don’t know where to find it.
Although millennial clients will have likely done their research when it comes to finding the right mortgage, using price comparison websites or online advice platforms, before speaking to an adviser in-person, protection policies are complex products which vary greatly depending on the kind you need.
Typically many mortgage advisers shy away from selling protection for a number of reasons including a lack of confidence and knowledge, compliance overheads or clunky processes and systems. Proprietary technologies such as Anorak’s platform are just one of the ways technology can help streamline the research process, keeping you in-step with the needs of your millennial clients and one step ahead of the dramatic jump in interest the market has seen in protection cover advice over the last year.
2. Millennials' flare for alternative banking brings more opportunities but also more options
Much has been reported on millennials' move away from a one-size-fits-all type of financial service provider. Instead today’s customers are utilising a variety of tools including challenger banks, money apps, online retailers and investment platforms, to make the most of flexible everyday banking services available today. Today, customers have a variety of options at their fingertips when it comes to managing money, so for complicated products like protection cover, it’s key to understand the variety of options available and which would work best in conjunction with other services.
It can be increasingly hard for advisers to factor in every available option to their clients, and how each service interacts or impacts other financial services. Protection advice platforms help to factor in each of these variables, in essence providing an overview of your clients finances to help you find the options which might best fit their unique needs.
3. If you can’t advise, you need to send your clients elsewhere
Finally, in light of the pandemic and the ramifications of national lockdowns, the UK government has shed a light on protection advice, by developing a system of signposting protection specialists.
As an adviser, if you don’t feel that protection sales are part of the proposition that you want to offer your clients, it’s important to point them in the direction of someone who will, rather than risk leaving you clients financially vulnerable. This ‘signposting’ option will ensure your clients are fully catered for in a turbulent and unpredictable market, circumstances which particularly impact younger buyers who have less collateral to fall back on if the worst happens.
