New Chief Executive of AMI announced today

The Association of Mortgage Intermediaries has today announced that Stephanie Charman has been appointed as the new Chief Executive of AMI...

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AMI’s new Protection Viewpoint Report: Making Protection Personal

This year's AMI Protection Viewpoint report calls for more personalised protection: Four-point action plan unveiled to help advisers engage better...
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We must value our advice and make it count

AMI Senior Policy Adviser Stacy Penn looks at lessons from other industries to help mortgage intermediaries promote their offerings in the protection space, (originally published in Cover magazine under the title "Lessons from the travel industry on value of protection advice").

The word ‘value’ is everywhere you look; the FCA is reviewing whether value provided by firms is fair under Consumer Duty, consumers are more conscious of it due to cost-of-living pressures and here at the Association of Mortgage Intermediaries (AMI) we dedicated a whole segment of our 2023 Protection Viewpoint report to the topic.

Defining the value provided to consumers should be high on firms’ agendas and not just from a regulatory perspective. AMI’s recent report The Perception Gap found that around 1 in 5 consumers (22%) are unable to recognise any benefits of using a mortgage adviser for protection advice. It is likely this figure includes those that do not see any benefits at all.

The benefit identified most by consumers was that advisers are ‘knowledgeable’ but even then, this was only selected by around 1 in 3 consumers (36%). In second place was ‘ability to speak to a human being’ (34%) and in third, their regulatory status (31%).

This is a shame as we know consumers view protection as more important than the industry perhaps initially realised (65% view life insurance as important, with the figures at 55% for critical illness and 54% for income protection) yet the take up of protection products remains low (7% hold income protection, 11% critical illness and 32% life insurance). Engaging consumers on protection as part of the mortgage journey could be one way to help close this gap – a house purchase was the main trigger for consumers that bought life insurance, income protection or critical illness. Almost 1 in 3 consumers (32%) that bought IP said they did so because of their house purchase – the top answer – compared to around 1 in 5 (21%) that said it was because they got a new job (the second most popular answer).

This underlines the important role that mortgage intermediaries play in the protection space. Whether firms advise on these products themselves, refer to a colleague or another firm or signpost to a third party, those firms with protection insurance permissions should have a clear pathway to ensure their customers do not fall through the net at what is clearly such a crucial time for protection discussions to take place.

However, I wonder how many consumers think that an adviser simply replicates the work of a price comparison website? We are great at talking about the role of advice within firms and the wider industry, but that’s not where our customers are. So, unless we are talking about it and helping prospective and existing customers understand what differentiates advice firms from buying online via a non-advised route, we can’t blame consumers for not ‘getting’ it.

I often come across mortgage advice firms’ websites and posts on social media that talk about why consumers may wish to consider using an adviser for their mortgage but this type of content is not as common when it comes to protection. With protection arguably a less tangible product than a mortgage (at least with a mortgage a customer can picture themselves in their new home) this is an area that needs work.

Earlier this year AMI ran a session with a selection of mortgage intermediary firms, Viewpoint insurer sponsors Royal London and L&G, the Income Protection Task Force and the Protection Distributors Group. It is easy for tunnel vision to creep in, which is why I shared with the group a case study from outside the protection world: the travel agent Trailfinders. I had not long received their customer newsletter featuring a charismatic introduction from their Chair Sir Michael Gooley CBE. His short summary brought to life succinctly and passionately the value of using their services compared to other buying routes.

Phrases used by Sir Michael that stood out to me included:

‘Stumbling around the internet without advice may seem empowering but it risks many pitfalls, is very time consuming and offers scant support when snags come up’.

‘It is so good to talk. It is the original means of human communication and still by far the fastest with instant two way questions and answers’.

‘A pleasant discussion allowing humour and anecdotes with the comfort of sharing the responsibility for your travel plans come what may’.

Whilst insurance may not be as glamorous as travel and, unlike a holiday, is not a product or service that most clamour for, we need to do more to bring to life the role of advisers. At AMI we encourage both advice firms and insurers to review how they can communicate this to consumers in a clear and engaging way. Let’s take a leaf out of Trailfinders’ book and be loud and proud about what mortgage advisers can offer.   

AMI’s Protection Viewpoint 2023: The Perception Gap report is a survey of 3,000 UK adults and 436 IFAs/mortgage advisers. You can read the report in full below.

AMI Protection Viewpoint 2023: The Perception Gap

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AMI is the trading name of The Association of Mortgage Intermediaries Limited which is a company limited by guarantee, registered in England and Wales under the Companies Acts with number 7982341. Our registered address is Celixir House, Stratford Business & Technology Park, Innovation Way, Banbury Road, Stratford-upon-Avon, Warwickshire, CV37 7GZ.

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