How come you’re not selling more protection?

This is a question I’ve found myself asking of several firms that I worked with this year. Their businesses are growing revenue strongly, their proposition is very client focused and they are seeking to add value at every turn… but there seems to be surprisingly little focus on protection.

When I dig a little deeper, it typically emerges that their background is in the investment and/or pensions space and this is the foundation on which they have built their business. They live and breathe economic matters, the markets and investment propositions. Most have successfully transitioned their businesses into the financial planning space too, with excellence being delivered in this area. But somehow, protection doesn’t seem to feature much.

The need for protection is clearly understood by them – they have heard and sometimes seen among their own clients the devastating impact of illness or death on individuals and their families, and the peace of mind afforded by protection insurance.

So, what are the reasons I’ve heard that are stopping them from selling more protection business? And what are the alternative perspectives they maybe should consider?


Our clients want us to focus on their investments

This is a legitimate reason, as it is one that I believe clients sometimes put forward. They see the value in their financial planner being delivered by the development of the financial plan, and then the support they get in selecting the optimal investment and pension propositions. They see the value coming from the growth of their wealth.

However, in these situations it is prudent for the financial planner to take a step back and demonstrate the importance of considering financial protection as one of the bedrocks of a comprehensive financial plan. After all, much of the conversation about investments will centre around risk – the economic backdrop, achieving the optimal asset allocation, potential stock market outcomes and even the performance of individual active managers. How can you have a conversation about risk without discussing the most impactful risk of all – the mortality, health and circumstances of the client?


Our clients see protection as unnecessary / poor value

This one takes education of the client. Certainly, if discretionary income is tight, clients can baulk at seeing protection premia dripping out of their bank account each month. And while car insurance is a legal requirement and mortgage protection is a condition of approval of a mortgage, the likes of specified illness cover and income protection are not a mandatory requirement. And so, they become a grudge purchase…

The answer to this is in stressing the importance of financial protection. After all, if someone loses their income due to an accident or illness, every asset and service that is reliant on this income is threatened. Income protection is the glue that holds everything together. Without an income, a mortgage can’t be paid and a home is at risk, loans cannot be repaid, day to day expenditure becomes a major challenge and all luxuries are gone. Is this a risk worth even contemplating?


I don’t have the time or expertise

This is one I’ve heard and that I just don’t buy… Your clients are poorly served by your lack of time or expertise. You claim to have their interests at heart but are neglecting a fundamental part of the service they should be receiving from you. Your clients are probably not even aware of the importance of financial protection, but you as their professional adviser are the person responsible for raising this awareness.

A lack of time or knowledge are not acceptable reasons. Hire another person and/or build your own knowledge and deliver a truly comprehensive service to your clients going forwards.


My clients generally have enough cover anyway

Again, this one is valid – some of the time. Some clients have benevolent employers who provide a broad range of employee benefits that may include life assurance, income protection and some sick-pay benefits. But there are equally many more employers who provide partial packages only, or in lots of cases no benefits at all.

When a client suggests they have sufficient employee benefits, I believe it is still incumbent on a financial planner to validate this information, with a view to confirming that there is sufficient cover in place… or not. Again, your client will thank you for this. Yes, there is a financial cost to putting more financial protection in place, but for clients who as a result of your advice become fully financially protected, the peace of mind is immeasurable.

My personal belief is that a financial plan is not complete without a full view of future cashflows, and that the real value of this part of the plan is considering a broad range of scenarios – the “What if” questions. When you get into these scenarios, this exercise can only be considered to be complete when you have examined the impact of an illness or death. And the results of these scenarios in most cases raises the need for protection products.

So my challenge to these advisers is; Are you actually completing a comprehensive financial plan, without a full conversation around protection needs and solutions?

What services will you outsource in 2024?

As we come towards the end of another year, the minds of many financial advisers are taken up with reflecting on the year just gone and planning for the year. The good news is that the reflections are generally positive, with most firms reporting a strong year behind them, with growth in turnover, assets and hopefully profit too. They generally have been successful in attracting new clients and retaining existing clients. The aim is for more of the same in 2024.

The key challenges that advisers speak to me about are on the operational side of their business. With the growth of their business, comes greater demands on the resources of it. And the primary and most valuable resources – people – are very thin on the ground. Firms are finding it extremely difficult to hire the calibre of people they are seeking. Overlaid on top of this are an ever-increasing compliance burden, technology changing at breakneck speed particularly in the AI space and increasing complexity in managing all the parts of the business.

Help is needed before the business starts to buckle under the strain, and for many firms the answer may lie in outsourcing.


What is outsourcing

The Financial Conduct Authority (FCA) in the UK defines outsourcing as a business involved in an arrangement where a service provider performs a process, service or activity on behalf of a company that the company would otherwise carry out itself.

It is simply the use of third parties to carry out some functions on behalf of the firm. It’s done mainly to reduce the need to involve the in-house team, reduce cost, bring specialist expertise and to ensure some critical core functions are properly delivered.


What services are outsourced by financial advice firms?

With the exception of the core service of providing advice, pretty much every other function is capable of being outsourced. Financial brokers and planners retain the critical responsibility of the provision of financial advice – after all, this is what the clients want from you. Typically, the basic administration services remain in-house too. These ensure that the client relationship quite rightly remains with the core team within the business, who continue to provide the advice and service that the client values most.

But pretty much every other function is secondary, at least in the client’s eyes, and can be outsourced if this makes sense. For example, if the team are already flat out with delivering quality advice and service, there may be no more capacity to look after these additional functions. Common functions that are outsourced include,

  • IT: Most advice firms don’t have an in-house IT resource but utilise an external service provider for IT and data security services, network management and staying attuned to technology advances.
  • Paraplanning: With the growth of financial planning as a core service and the increased depth and complexity of financial plans being delivered, an increasing number of advice firms are now using 3rd party paraplanning services to develop their financial plans. The relationship and delivery of the plan remains with the adviser, with the paraplanner working in the background on the development of the plan.
  • Marketing: Most firms don’t have an in-house marketing expert and after spending time and money (each of which is in short supply) on campaigns that didn’t meet expectations or on trying to deliver regular communications to clients, they recognise the value in utilising third party expertise.
  • Compliance: While retaining all regulatory obligations, many firms now utilise external compliance resources to ensure they stay up to date with their existing responsibilities while also being kept informed of all new requirements. This is one area that firms cannot afford to get wrong.

And then there’s the rest… Examples include external HR consultants to help them recruit and develop professional HR standards and external trainers to help develop the skills within the team.


The benefits of outsourcing

These are numerous. The primary benefit is in enabling the core in-house team to focus on where they add the most value – delivering to clients. Equally important is the access that is gained to specialists, as opposed to muddling through tasks yourselves that you may not have the skills for.

Operational efficiency should also ensue as the third party providers specialise in these areas and should be able to complete the tasks quicker, at lower cost and to a higher standard. They also will ensure that your firm is leveraging the most advanced technologies that otherwise you might be unaware of.


What are the steps to outsourcing?

The place to start is within your own business, considering your operational effectiveness. What are the tasks that you should be doing, that you’re just not getting to? Once you consider this, then you can start thinking about external partners.

The key then is to identify a partner who will meet your exact needs. Speak to other financial brokers, check out industry publications or speak to the likes of Brokers Ireland who may be aware of providers of the services you are seeking. Where possible, seek partners who have a deep knowledge of the world of financial brokers so that you don’t have to spend your time educating them! After identifying a potential provider, outline what you need and seek a proposal from them. Check their references and closely examine their costs to ensure you will gain enough value from their services. Would you be better off hiring another person instead?

Consider the risks – could a third-party underdeliver and end up damaging your brand? Even worse, could their services land you on the wrong side of some of your regulatory obligations? Or could they simply underperform and be a waste of money? Challenge the 3rd party and again, seek testimonials from similar firms to your own.

And then review their performance regularly. Are you gaining the benefits you expected and does outsourcing remain the right approach for you?


Maybe 2024 is the year that you will build some excellent outsourcing relationships to enable you to maximise the potential of your business.

Develop your Soft Skills

As an important element of the research completed for Brokers Ireland on “The Evolution of the Broker Market 2030”, we identified 12 areas to be considered by Financial Brokers to help prepare your business for the changing market environment.  This final action is probably the most important – developing your soft skills.

In 2021, 194 advisers from Ireland, the UK and South Africa were asked about their interpretation of value.[1] They were presented with a list of 20 skills and attributes and asked to choose their five most important ones, within four categories:

  • Soft Skills
  • Building a Financial Plan
  • Putting the Plan into Action
  • Ongoing Service

Empathy was ranked as the most important skill or attribute by 76% of advisers. This was the clear leader, ahead of Goal Setting (49%) and giving clients Peace of Mind / The Gift of Time (47%). What is noteworthy is the importance placed on soft skills as opposed to technical expertise.

These findings are consistent with the anticipated shift in focus of client propositions away from technical and product areas to instead supporting clients by providing valued financial guidance and ongoing behavioural coaching. This will require an extension of the existing skillset of some Financial Brokers.

Some Financial Brokers may need to review their own ability to have excellent, emotional and empathetic conversations. Today it is relatively commonplace for advisers in the UK and further afield to do courses with organisations like the Kinder Institute of Life Planning,[2] to complete relevant diplomas and to actively work on improving their soft skills.

Do you need coaching in these areas?


Action points for you

  1. Identify the soft skills that you need to carry out your role effectively and get relevant coaching where needed.
  2. Embed these skills into the DNA of your Financial Broker business, placing emphasis on the use of them as much as technical skills.
  3. Train every team member and reward soft skills development.
  4. Practice relentlessly across the team using observation, role plays etc.

[1] PortfolioMetrix – The Insider’s Guide to The Value of Advice, 2021


Digitalise your business processes

As an important element of the research completed for Brokers Ireland on “The Evolution of the Broker Market 2030”, we identified 12 areas to be considered by Financial Brokers to help prepare your business for the changing market environment. In this next instalment, we look at the importance of digitalisation.

As Financial Brokers will seek to scale up and/or take cost out of their businesses, developing more efficient and effective processes will be critical, with digitalisation at the heart of your improvements.

The COVID pandemic showed what can be achieved through digital adoption. Almost overnight Financial Brokers moved their meetings to remote meeting platforms, a move that had been dismissed previously as never being acceptable to clients. Today, many clients prefer the efficiency of remote meetings. Also, very quickly the ability to use digital signature technology was accepted by providers and rolled out by Brokers, again aiding efficiency.

But there’s a long way to go and for most Financial Brokers, these technology improvements need to be developed at an industry level. The advice process improved hugely with the introduction of cash flow planning technology, but the reality is that there has been only marginal technological enhancement over the last decade.

But this does not give Financial Brokers a free pass! Every process, from prospect engagement, client onboarding, your advice process, your ongoing customer support processes and right through your ancillary business processes should be regularly reviewed and digital improvements sought. By utilising solutions already within your customer relationship management (CRM) system and those available from product providers, there are many opportunities to develop more effective processes and increase engagement with clients. These digital enhancements may include things like:

  • enabling contacts to submit partly pre-qualified enquiries and to book meetings in your diary
  • using digital factfinds and application processes
  • regular reporting to clients on policies and performance via your CRM system
  • enabling clients to self-serve through client portals
  • utilising email software for client newsletters and other updates.

Financial Brokers themselves identified compliance as their biggest challenge of the future. This always requires ongoing care and attention. Within this, GDPR is a challenge for Brokers that could become more significant in the future. Customer data requests could become a significant overhead, with excellent standards in relation to filing of information and emails etc. making these easier to manage.

Taking account of growth ambitions and achieving efficient scale within a business, outsourcing is an alternative model to in-house resources. In either case, Financial Brokers will recognise that their value is in front of clients, and that is where their time needs to be spent. While it is prudent to seek to achieve efficient scale through recruiting for key support roles, there is likely to also be growth over the coming years in third party outsourcing of services such as paraplanning, compliance, marketing etc.


Action points for you

  1. Examine every process within your business, identify areas for improvement and put a plan in place to achieve them.
  2. Examine efficiencies in the advice process across your business, and identify where digitalisation can play a role in an improved client experience at potentially lower time / cost.
  3. Maintain a highly structured approach to compliance.
  4. When you are clear about the efficient scale you wish to achieve, evaluate each individual process in terms of remaining in-house or not.