06 AUTUMN PROTECT NEWSLETTER The top reasons for long-term absence, classified as four weeks or more, in the workplace were: • Mental health, such as depression or anxiety (41%); • Musculoskeletal injuries, such as back pain (31%); • Other long-term health conditions, such as cancer (30%). • Stress (28%) and • Acute medical conditions, such as stroke or heart attack (24%) We know that many clients haven’t the cash reserves to last even shortterm absences due to their financial commitments so this research stresses the importance of considering IP as part of the financial planning process. Whilst we have seen a significant increase in IP sales over the post Covid Years, it is still very much an “under sold” Product. In addition, by offering preventative care through easy-to-access health benefits that target the key drivers of absence, employees are able to seek support early, before symptoms escalate. Providing affordable and accessible care supports the opportunity to return to work faster giving benefits to Employee and Employer alike. Many Insurers now offer these on individual and Group Life policies, allowing 24/7 access – Another powerful way to demonstrate the value of your advice to clients to ensure they are protected against the unexpected. Potential Regulatory Changes Affecting Protection Advice You may have seen that the FCA is looking to simplify advice for clients involved in certain mortgage transactions. Their Mortgage Rule Review (DP25/2) outlines concerns that, while the market is functioning well, it may be too “cautious”— potentially limiting consumer access. The paper highlights how rising house prices, stagnant wages, and stricter affordability criteria are making home ownership an increasingly challenging aspiration, especially for those without family financial support. One of many areas they focus on is Product Transfers and the effective “dumbing down” of the need for advice at the end of a lending cycle. Effectively opening the door to removing the need for any advice whatsoever. This could lead to a dual pricing market forming (or re-forming) where Lenders can focus on more actively keeping the customers that Intermediaries pass to them without the need for a fee. Whilst many argue this is very much the case as it stands – at least the Intermediary has a choice and can proffer the advice on staying with the existing Lender. Whatever it’s arguments, the “unintended consequence” of doing this will be the removal of an opportunity for Intermediaries to discuss Protection at the time the PT is effectively due for “renewal”. At the recent Mortgage Senate, this proposal was discussed with the regulator present. The CEO of AMI strongly opposed the move, stressing the importance of maintaining advice—especially as a key moment to discuss Protection needs. We’ve lobbied for this to change. With the Protection Gap still growing, the last thing the industry needs is fewer opportunities to speak to clients—even if those conversations happen only every 2 or 5 years. We remain fully committed
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