The world may be beyond anyone's control at a macroeconomic level but, says Paul Hudson, protecting against the unexpected is something all advisers can help clients with through income protection
With Britain on course to leave the European Union, the US potentially facing four years of unpredictable leadership and political uncertainties facing France, many might be left wondering - what does this all mean for me?
On a personal and professional level, it seems many issues remain unresolved - both in the UK and further afield - but how will this all play out financially? Should we batten down the hatches to prepare for leaner times? Or will it be business as usual - at least until we have some clarity?
Research from Cirencester Friendly has found one in 10 people saying the Brexit vote has affected their desire to take out protection insurance - and of those, 75% say they are more likely to take out income protection in the wake of the referendum.
This begs the question, why? Why does it take Britain changing its status quo to encourage people to consider what should happen to their financial situation if they should fall ill or be injured and unable to work?
A lot of people have an ‘it won't happen to me' mind-set - and of course there is no guarantee it will. With ABI statistics suggesting one million people a year have to stop work for more than four weeks due to illness or injury, however, it seems a risky gamble to take with their financial security. Particularly so, when it is easy to safeguard against such an event and take back some of the control from the hypothetical.
Cirencester Friendly has been around for more than 125 years providing income protection and, having just celebrated my 20 years in the job as chief executive, I remain as keen as ever to see our industry promoting the values of income protection.
When people are making important decisions about such matters as mortgages, pensions, investments and insurance, they should take the advice of a qualified professional. Advisers have a duty to ensure their clients have put adequate measures in place to protect against the unexpected, such as a period of ill health that will prevent them from working and earning, and providers have a duty of care to offer the right products to do this.
As a provider, we are very fortunate to work with some excellent advisers who are kind enough to offer regular feedback from their clients about what they need and want and, just as importantly, the products they do not want.
This, in turn, shapes the offerings we develop so we can provide specialised contracts, rather than a one-size fits all offering. This constant dialogue enables advisers and their clients to have control over their finances and provides the valuable peace of mind that, if the worst does come to pass, clients will not be faced with financial ruin as well as being incapacitated.
The world is in for an interesting and even challenging journey in the coming months and years and, at a macroeconomic level, it is not one we can control. Protecting against the unexpected is, however, something all advisers can help with. Perhaps now is the time to ensure that whatever happens, your clients' future income is better safeguarded. Even if their choice of political leaders can't be.
Paul Hudson is chief executive of Cirencester Friendly Society
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