The mortgage market appears, perhaps more gently than we'd like, to be starting to display some of those green shoots of recovery.
Of course there are concerns that interest rates may rise later in the year and there is still the risk of this ‘double-dip' in the economy which many fear. We might argue that we have yet to see an upturn in mortgage lending sufficient to ignite the housing market and in turn invigorate mortgage protection sales. Despite some upbeat messages, it's simply not clear when we might expect to return to the times when mortgages were bountiful.
Many pure mortgage advisers are seeking to increase the proportion of mortgages completed with some form of protection. For some, this means entering new territories although the effort is worthwhile in terms of income replacement and customers are able to protect what they've worked hard to accumulate. Win-win, one might argue. But if the market remains deflated for some time to come, advisers may wish to look to new markets if they are to survive, or prosper.
We might have expected to see a more substantial increase in protection sales over the past year - this usually happens when other markets are deflated. But the overall state of the mortgage market has countered any expected strong growth.
For those existing customers who couldn't afford protection cover at the time they took out the mortgage or where it wasn't a priority discussion, now could be the time to carry out a review. The need for cover if anything has increased and given the reduction in outgoings due to reduced SVR or tracker interest rates, there is more disposable income to pay for it.
For those advisers less used to protection sales, providers have created innovative ways to get business on the books as quickly and efficiently as possible, through a variety of means.
Of course if mortgage protection opportunities have been exhausted, it may be time to look for new opportunities - and there's one segment begging to be tapped - Business Protection.
Most industry commentators would agree that this is a vastly undersold segment with a relatively small proportion of businesses having adequate cover, whether in respect of commercial loans, key people, shareholders or partnerships. The products used are largely similar to those for mainstream protection, only set up in a different way.
The good news is that a growing number of providers are taking an interest in this segment and are making a range of facilities available including:
• dedicated websites
• access to large case underwriters, including pre-application helplines
• a range of trusts and legal/technical assistance
• adviser tools aimed at new entrants, including factfinds
• masterclasses intended for new entrants
• specialist consultant support
Many of you will have clients who run businesses, for whom you've organised pension arrangements, liability cover, perhaps commercial insurance. It's worth exploring what arrangements they've put in place in terms of business liabilities or succession planning. Your investment clients may also be a source of Business Protection opportunities.
Business Protection will typically involve your older, more important clients but providers acknowledge this and have tailored their propositions accordingly, ensuring first class service and support.
Whether or not you're looking for new opportunities, this is a segment worth being aware of. The BP protection gap is huge and a great opportunity in difficult times.
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