Don’t Forget Protection

Hi everyone, this week Roy interviews Lee Robertson from Octo Members. Lee and Roy have an extensive chat about wealth management, protection insurance, signposting and more.

Lee has built a platform that allows advisers, from many areas within financial services, to join together to share their knowledge. This private community is focused upon bringing together experts who can discuss best practices, that can generate respectful debate and practical tips for action.

The key takeaways:

  1. Gift inter vivos and joint life second death policies can be an integral part of effective planning for inheritance tax.
  2. Protection used to be the first building blocks of a financial plan, but it’s not seen to be as interesting as other parts of wealth management.
  3. The need to challenge client’s mindsets of the financial needs for the whole household.

On the next podcast I will be back with Matt Rann and we will be chatting about cancer, especially bowel cancer. We will be chatting about early warning signs, potential treatments and what this can mean if you are trying to support someone to get protection insurance.

Remember, if you are listening to this as part of your work, you can claim a CPD certificate on our website.

Roy:            Hi everybody, this is episode six of season three.  I’m Roy McLoughlin and I’m delighted to have Lee Robertson from Octo Members with me.  Hi Lee!

Lee:             Hi Roy!

Roy:            Today we are going to focus on wealth management and protection in particular and the intricacies of both those worlds.  This is the Practical Protection podcast.  So Lee, how are you?

Lee:             Listen, I’m very well indeed, thank you despite everything that’s going on.

Roy:            Yes, yes, strange times aren’t they?  So let’s start off with a bit of background because I’m conscious that most of our listeners on the protection side – they would have heard of your reputation I’m sure but won’t know you completely.  Do you want to give us a sort of quick potted history of who you are firstly and then we’ll go on to Octo?

Lee:             Yeah sure.  Lee Robertson, Chief Executive of Octo.  I was a practising adviser in one shape or another for 30 years.  A couple of years ago, 2018, I sold my majority shareholding in the practice that I’d founded to the people who worked there, my co-workers, because I had an itch I wanted to scratch which was to set up Octo – amongst lots of other reasons of course but that was one of them.

Roy:            Excellent and what sort of people belong to Octo?

Lee:             It’s a broad cross section, almost 3,000 members, all financial services professionals covering wealth management, protection, mortgages, fund sales, fund management, compliance – no members of the public – marketing people, but no members of the public, no press unless they’re working with us and no regulators.  So it’s retail financial services practitioners in which ever discipline they sit within financial services.

Roy:            Marvellous.  What would you say your first experiences of protection were all those years ago?

Lee:             Well funnily enough, there’s two firsts – there’s two firsts.  One is professionally and one is personally.  Professionally I came into financial services, like many of my generation, almost by accident.  I came in having left the armed forces – I was going to join a Government department but they were mucking around.  It was the usual reluctance to change which is one more misnomer for cutting back and my start date kept getting delayed so I needed to earn in the meantime so I went into direct sales with Allied Dunbar, you know, great name I thought.  What did I know?  Actually, funnily enough the training was fantastic though it was mainly sales training more than anything but they were very heavily into protection and I think the founders of Allied Dunbar were also the founders of the other one – I can’t think of their name but it was very much about critical illness.  It was South African, it was Mark Weinberg so critical illness was one of their key drivers in terms of product set so that would have been professionally.  On a personal basis, Michael Allister up in Scotland was a Cooperative Insurance industrial branch salesman so I kind of grew up with insurance in the family if that makes sense and we needed it.  My father, who was in the building trade, had an industrial accident and if it hadn’t been for the insurance I think we might not have fared as well as we did.

Roy:            Oh right, so something happened to you at quite an early age which actually brought insurance right home, which sort of comes onto, you know, the subject we talk to a lot of our people about which is how important do you think these real-life studies are actually, you know, real-life anecdotes in terms of people having belief in a product?

Lee:             You know, you can only go from personal experience.  I think it’s incredibly important, you know, I come from a military background, people sadly die.  Also in your formative years, to be around something that’s almost, you know, it’s intangible, it’s an insurance, you don’t know what it is but the fact that it helped the family so deeply and profoundly at that time is really important. Though of course as you progress through a professional career and despite being, you know, heading a practice where I, you know, we had discretionary permissions, we were seen as quite investment-led although we never were, we were financial planning-led but we always, always made sure that we were offering protection as part of the product set.  So you – or the service that we offered – so it was incredibly important and we saw really deep, profound value in what happened and how it helped some of our clients so I think the long answer to a very short question Roy, I think personal experience is really important, personal stories, back stories are very, very important.  But also stories of clients which is perhaps the wrong way to describe it – but to see the way it’s helped at the most difficult times is both humbling and uplifting.

Roy:            Yeah.  Interesting you mentioned Allied Dunbar.  There’s, you know, much maligned by some but actually to give them, you know, credence, a lot of people that started off there were very well educated in terms of protection because the training there I hear was second to none and that’s very true of a lot of direct salesforces in the 80s, 90s, early noughties.  Do you worry that part of the industry’s problem with protection is that there isn’t that training so much anymore because those sort of companies aren’t around?

Lee:             You know, I think so.  It’s a really good question.  I was thinking about, before I came on with you, I was thinking about, you know, we were talking backstory and history a second ago, I was thinking when I grew up there was Scottish Widows and Standard Life and there was Life Association of Scotland and Scottish Amicable and so I grew up in a country that obviously believed in insurance and probably because all these companies grew out of military campaigns and that kind of stuff to look after soldiers.  But what it did was, I think it gave the sector or the industry as it was then, masses and masses of experience and resource to draw upon.  I mean, there used to be technical helpdesks, there was lots of training, there was lots of getting together to talk about these issues in a way that only really seems to happen now about investments and funds and I think platforms for me, you know, investment platforms were one of the key moments in wealth management or independent financial advice or financial planning in terms of being able to talk to clients and give them real-time information etcetera, etcetera.

But what I think – one of the things that also happened at the same time was advisers or – not all advisers of course but many advisers got incredibly interested in the investment bit and less interested in the other bit.  So I think it is a shame that so many of these life co’s have gone, have merged, have cut back on the tech desks so the message perhaps isn’t getting out as strongly as it did in my formative years, so yeah.

Roy:            Yeah, I mean a great example of that, I don’t know if you agree, is inheritance tax planning.  I remember going to endless courses on inheritance tax, mainly run by some fabulous insurance companies and that sort of disappeared a little bit, you know, away. Yet one could argue that inheritance tax planning now is as important as it ever has been.

Lee:             Yeah, at least as important.  The nation has, whilst it may not feel like it at the moment, but because of property values etcetera, etcetera, the nation has become or certainly lots of the clients that are served by advisers have become much wealthier, you know, they’ve seen property inflation at rates that are unbelievable actually so money is passing down through generations.  There are many successful businesses, all sorts of succession planning going on so I agree with you.  I think inheritance tax is really important now in a way that perhaps it wouldn’t have been before.  Successive budgets mean more and more people get caught by it so the planning around it has got to be fundamentally important.

Roy:            And, you know, for many of our listeners that maybe haven’t gone into inheritance tax planning in that way before, is there an image sometimes that inheritance tax planning is all about wealth management planning and not so much about protection whereas you and I know that protection could be an integral solution?  Is that a fair challenge?

Lee:             I think, you know, often we end up talking in generalisations but I think it is a fair challenge.  I think one of the things that struck me coming from a working class background Scottish family is we tended not to talk about money whereas when I became a financial adviser and then latterly a planner, what I realised was people with money talk about money a lot and interestingly those with money talk a lot about succession planning and they’re willing to address these issues and I remember being really quite horrified sometimes when people would say to me in meetings, “Oh yes but Granny’s going to die shortly and she’s going to leave me X.”  I was like, “What?  How do you even know that?  You’re planning your Granny’s death almost,” and that was the way I addressed it in my own mind but of course that wasn’t.  It just meant they had family discussions and they knew what was coming and they’d done lots and lots of proper planning.

So going back to the point, I think it is fundamentally important, people aren’t addressing it as well as they might do.  Often the solutions that you see can be quite engineered using investments and different sorts of, you know, shared portfolios and aim portfolios and all sorts of bits and pieces whereas I think good old fashioned, you know, gifting to vivos – there’s still a lot of use and value in those types of policies for a certain outcome in a way that investments sometimes don’t give you.

Roy:            Now we’re going to come onto the attitude of the wealth manager industry protection shortly but on this particular subject, do you perceive or do you sense that there’s an element of some of the wealth managers thinking, “Yes, I know that protection is a solution to part of IHT,” and you’ve mentioned gifting to vivos and obviously the traditional joint life second death policies but I think that, you know, getting this insurance is harder for these people because they tend to be older therefore, “I’m not going to do it,” and that may be the problem is in our mind rather than looking into it as in is there a barrier to this advice because there is a perception that getting protection is hard?

Lee:             I think so.  You know, there are less providers now so there’s a good starting point.  As we’ve said, there are less providers.  It is less readily available perhaps in the adviser’s mind.  You, because of your experience, might argue differently that it is still available but I also think there’s a familiarity thing.  When I was – basically came into the sector, we never didn’t discuss protection.  It was part of what we did with our clients.  In fact, I am on record as saying I used to think it’s the first building blocks of a financial plan long before we really spoke about financial plans.  But as people did less of it, as companies retreated from offering it, it begins to drop out of the mindset.  Now, you know, apologies for generalisations here but, you know, whenever you talk about a subject you end up straying into them.  So I think as we talk about it less and we do it less and we look for other solutions and other – and the providers retreat a bit, you become less familiar with it and this is a rubbish analogy but it’s a bit like, the hardest bit about going to the gym is actually putting your kit on.  Once you’re there you enjoy it and it’s the bit the same I think – and apologies for the analogy, but I think it’s the bit the same with protection.  Unless you’ve put the kit on and start doing the job, it’s just too easy not to do it.

So I think as people retreated from it, it became easy not to talk about – not to do it.  The skillset – and in protection the skillset is really high, your skillset drops off, you know less people, you know less underwriters whether, you know, there are less technical helpdesks to pick their brains etcetera, etcetera – so it’s easy just not to talk about it and let’s talk about the sexy stuff which is your portfolio.

Roy:            Yeah, no I think that analogy not only is a brilliant one but I think it’s spot on because it’s something that I hear quite a lot.  I mean, the elephant in the room here I guess is – and you’ve alluded to this, a lot of wealth managers started off doing quite a lot of protection which is in a way strange and they always tell you that within minutes but have sort of almost, yeah, have decided not to put that gym kit on and gone off and done other things.  So it’s not that they haven’t experienced protection but yeah, maybe they’ve become rusty or, you know, there are other reasons as well but I guess one of the central questions to someone like yourself with the experience that you’ve got is do you think that there’s an element of people where there’s – almost protection is something that’s, I don’t know, not seen as integral and is almost, you know, that too posh to protect attitude with some?

Lee:             Listen, I don’t doubt for a second there are some that are too posh to protect, you know, and if you look particularly up the scale you can definitely see it.  You know, I used to regularly pick up clients from private banks and no one had spoken to them about the protection, no one, and yet they had debt – high debt levels as well as high asset levels, they had family obligations if something happened to them and nobody had ever spoken to them about the most basic thing which was to transfer the risk from them personally to an insurance company of some catastrophe happening.  So I think I’ve got first-hand experience of that.  There are definitely organisations out there that feel that they’re too posh to protect.  What the reasons for – we’ve covered some of them, I think there are other reasons but I think definitely too posh to protect is a phrase that I use and it’s got a grip of certain organisations and it’s a crying shame actually.

Roy:            Now, whilst one might understand that attitude and, you know, we can question it all day long, I think hopefully one of the solutions has been the advent of signposting that’s come along and obviously that can have some quite revolutionary results, you know, if that is the attitude out there.  Signposting has always been here.  You and I have been signposting for years – that we didn’t call it signposting is irrelevant but it suddenly is the flavour of the day.  Signposting in particular with protection in mind, do you think that could change the view of some of those people in the wealth management side?  As in, they don’t want to do it themselves but they should do it and then they go and find someone that could do it on their behalf?

Lee:             Listen, I think so.  If you’re not willing to do it yourself, you’ve identified hopefully through your career – your time spent with your client that there’s a requirement for protection but you have neither the time or the confidence or the skill anymore to do it, then I think you are obligated, you know, to go and find someone to help you and signposting is just – as you say, we didn’t use to call it signposting but it’s a great way of working collaboratively with an adviser who specialises in that area in a way that you no longer do, to make sure that your client gets the right outcomes and outcomes is one of those words – the regulator likes it but actually it fits here.  A good outcome for a client is to be well-insured and to transfer the risk from them personally and their family or their business or whatever it is – from themselves to an insurance company for a relatively modest cost.  They can do it themselves.  I think they are obligated to find something to help them.

Roy:            Yeah, it’s strange isn’t it?  Since the IDD has come in and this, you know, this requirement to do your 15 hours, I’m sometimes sensing that some people are saying, “I’ve done a course, I’ve done my 15 hours, now let’s get on with our lives.”  Is that a little bit the wrong attitude by some would you say?

Lee:             Yeah.  I’ve not noticed that as much but you’re perhaps closer to it but I think it is wrong.  I think to be a good financial planner in whichever part of the sector you are in requires more than 15 hours.  It requires lifelong learning and the very best people that we know, yourselves included, do this all day every day.  You know, not just formal training to tick some CPD thing to keep your qualification up and get your statement of professional standing next year, it’s because you understand that it takes a huge amount of effort to get it right and things change all the time.

Roy:            I guess the other thing about signposting is that – and this does need more publicity, is signposting works both ways of course.  It’s not just potentially the wealth manager giving the protection adviser business, it can be the other way around as well.  So what would you say to protection advisers, which would be a vast amount of people listening to this currently, are the reasons for maybe thinking about referring business the other way as well?  I’m just thinking about captive audiences.

Lee:             Yeah, obviously the very best relationships work as a two-way basis don’t they?  Mutually beneficial, where you can work collaboratively to get the right outcomes, I’ll use that word again.  I almost told myself I wouldn’t but, you know, it just fits here.  So I think the very best outcomes come from working collaboratively and just as I’ve described some financial planners or wealth managers should be looking to collaborate with people for protection, just the same, protection advisers may spot opportunities where people at the most basic level just using a very simple example, aren’t using the right set of attributes they should be etcetera.  They should be looking to collaborate with people that collaborate with them to help address those issues and get better outcomes on that side.  That way, you form a proper business mutually beneficial relationship where you like referring to each other, you build confidence in each other and you understand that you’ve both got the client’s interests at heart.

Roy:            Would you also presumably throw the mortgage market into that equation as well?

Lee:             Absolutely.  We used – in my case, we did mortgages for a while but we realised that it took a lot of time, it took a lot of specialist experience, it took a lot of – interestingly, maybe it’s changed a bit now but it also took a lot of personal relationships with lenders.  Lots – and I think this is the same in protection, sometimes it’s as much who you know as what you know at times.  You just need a little bit of help to get things over the line or to explain if people have a particular medical condition or something and I think that’s the same on mortgages.  So in our practice, we stopped doing mortgages and we had – in effect we were signposting our mortgages to mortgage specialists.

Roy:            Exactly.  Yeah, no it’s interesting, signposting those of us who have been around slightly longer – has been around – I’d also throw private medical insurance into that as well of course.

Lee:             Yeah.

Roy:            Let’s talk a little bit about more current issues.  Covid, I mean it’s completely changed the protection world as I am sure you’re aware.  What’s it done to the wealth management world would you say?

Lee:             What’s it done to the wealth management world?  I think it’s – there’s lot of things and actually with Octo we can see a lot of it ‘cos we talk about it all the time but what it has done it’s definitely accelerated the adoption of technology.  You know, I used to have this discussion in my practice all the time with the financial planners about why were we dragging clients up to town?  We were based in the City of London.  Why were we dragging our clients up to town for a nice cup of tea and a biscuit to tell them things were largely the same as it was last year?  So we’re taking three hours out of their day or whatever it was and they always used to push back on, you know, “They want to see us, they don’t want to do Skype or Zoom or whatever.”  So that’s been a big change that the adoption of technology has definitely moved forward.

I think retail advice across wealth management, financial planning, mortgages, protection are to be congratulated on their – the way they’ve dealt with this crisis.  I think they have adopted and adapted really quickly new ways of working, new flexibilities, new ways of communication and they are to be commended.  I think they’ve done it in a way that many of the other professions haven’t so they are definitely to be commended.  So I think – what’s changed?  I think working hours have changed, I think places of work have very obviously changed and I’m not even sure it will ever go back to the way it was.  I think there’s more flexibility in the workplace which – financial planning or retail financial services –because your audience is broader but, you know, I think they have an opportunity to work flexibly in the way that perhaps other professions don’t.  You know, doctors sooner or later will have to see patients etcetera so I think those are the big changes I’ve seen.  The introduction of technology, of new ways of working, of new places of work, however that plays out and particularly in flexible working which suits I think the financial planning and protection and mortgage community in a way that it may not suit other professions.

Roy:            Now, there’s a very interesting and very topical subject at the moment, particularly over the last few days, of diversity issues which are quite rightly coming to the fore.  You and I have been in this industry I suspect an equal amount of time and witnessed on numerous occasions the fact that there is an industry totally under-represented by females, you know, I mean you go to conferences and you go to talks and you just see advisers around you and the lack of females has always been a worry issue.  Do you think therefore the flexibility that you just alluded to, which is something that I think has been sort of thrown at me as a reason for sometimes it being difficult being an adviser in particular, do you think that the flexibility – let’s say opportunities that come out of this crisis are consummate with getting more female advisers involved?

Lee:             I hope so.  I mean, listen, I really hope so.  You’re right, we’ve probably been in the sector about the same amount of time.  We used to go to these conferences and if you saw a woman in the audience, it was a bit of a rarity.  You know, it really was and it’s great that we’ve moved on from there.  I think in my practice we have a policy – we used to do things like – not because it was forced on us but because we thought it was good business practice.  It’s good business practice to have a happy, motivated team.  I like women in business but I think they give a very different perspective to men.  Interestingly, despite being ex-military and ex-rugby player, I’m not a massive fan of conflict.  I try to avoid arguments wherever possible by being collaborative so often I have to be quite, you know, I kind of wander around the point hoping somebody will get the point I’m trying to say.  Having women in the business, I find – another generalisation – but they can be much more direct and I used to like having women around me that way.  I think they think differently, they act differently, they are less inclined to, you know, men go from zero to 60 very quickly there’s all sorts of stuff in there.

But we used to do things – and I’m conscious I’m talking a lot here, but we did things because it was good business, not because we felt there was some imperative to do it.  You know, we used to do things like we used to shut between Christmas and New Year but we didn’t deduct that from staff holidays because it’s a really important family time.  If kids had sports days, we used to give that day off or half day off if that’s what they wanted and we didn’t deduct that from holiday.  If there were children and we had a – I had a team member who one of her children had a medical issue, if there were doctors appointments, hospital appointments, that was never deducted from salary so – or from leave or any of that kind of stuff because it was just the way I felt I wanted my practice to run which was pastoral and collaborative and flexible.

Now move that forward to answer your question and I give a big shout-out to many of the inspirational women I have met along the way who were better financial planners than I was who were on the beach before I was with the IFP and all the other stuff and I’m thinking of Julie Lord and Marlene Outrim and others, Becky Taylor, you know, real inspirations, you know, they played off the men’s tee – using another sports analogy and didn’t ask for fear or favour and really demonstrated what they had to do.  But if we can have a more open, generous, flexible workplace as a result of Covid which encourages more women to enter financial services, to reach for the stars and become practice leaders which many of them are now already, then that’s surely got to be a good thing for our sector.  Surely, you know, it’s just good business.

Roy:            Yeah.  I mean the great news on the protection side of the fence is that this is happening more.  Recently, Open Work have announced that 36% I believe of their new intake are female advisers so we are going in the right direction.  There’s a long way to go and of course diversity is across lots of different mediums but I think the flexibility angle which is something that has always been thrown at the industry in the past will change because of Covid as we’ve said so, you know, hopefully there is some massive well-timed progression there as well.  So that’s good.

Lee:             I do have a caveat, Roy, though.

Roy:            Yeah.

Lee:             And my caveat –

Roy:            We like a caveat!

Lee:             If we want more people to come into financial services from diverse backgrounds –

Roy:            Yeah.

Lee:             Be they women or from the BAME community or, you know, LGBTQ+ or whatever, we’ve got to stop this nonsense that I see all too often on social media and below the lines on our trade websites where someone has an opinion which is a personally-held opinion and then they get beasted for it just for having an opinion.  Now, maybe I’m just seeing it through sort of white male eyes but largely it’s women getting the beating.

Roy:            Yeah.

Lee:             They have an opinion or they have a viewpoint which they are perfectly entitled to have.  It’s based on their personal or professional experiences.  What they don’t need to do is have people that look like us – I’m not saying we would, in fact you and I know we wouldn’t, but people who look like us immediately jump on them and give them some kind of digital kicking just for having a personal or professional point of view.  No wonder at times women despair of our sector.

Roy:            Yeah.

Lee:             It’s a – I get quite angry about it.

Roy:            I totally concur.  There’s no patting our industry on the back yet, there’s a very, very long way to go.  Let’s go back slightly to the wealth management side of things.  Talk to any wealth manager and within seconds they will all mention cashflow models.  Okay, it’s just something that rolls of the tongue as you well know and there are some fantastic models out there.  I don’t know if you agree, but the cashflow models that I’ve seen, as excellent as they are on the wealth side are still seemingly lacking something on the protection side and what seems strange to me here is that we’re talking often about things going wrong so for our listeners we will use something called a black swan event which is used to basically model a stock market crash when you’re doing a cashflow model and yet something going wrong could easily be someone becoming ill.  Do you think cashflow models, whilst they claim there’s some protection in them, still need developing and I’ll throw in a sub-question which is, is that also an attitude that needs developing so that things going wrong in peoples’ lives are not just stock market crashes?

Lee:             Yeah.  So the short answers are yes and yes but I think they do need more developing.  When used well, cashflow modelling or lifestyle financial planning – however people use – whichever nomenclature that you use, is incredibly powerful with a client but it’s got to take into things more than accumulation, decumulation, investment growth, investment return etcetera, etcetera.  It’s got to take in the potential and the very best advisers do this, you know, Prestwood when – I’m going to mention Prestwood.  Prestwood when used well models this incredibly well but there are other systems out there which do address it but I think it comes back to the familiarity thing again.  These are difficult discussions to have with clients.  To say to a client, as I was taught, to say to – you’ve got a couple in front of you and you say to the couple and particularly, you know, the non-breadwinner in the couple if there is a non-breadwinner is so – or the primary caregiver or however you describe it, “If your partner wasn’t here tomorrow and that money stopped, how would you cope?”

Those are big, important, difficult discussions to have with people and clients can get very emotional, they can get quite disturbed, you know, so I think some advisers – some, a generalisation again, have backed off from those discussions and because lots of these software modelling tools are built on feedback from advisers, if they’re talking about it less, there’s less input going into it and that’s a really broad generalisation I know.  I think the very best of them deal with it well but how many advisers are confident enough to have – and professional enough to have those discussions which are very deep, meaningful, disturbing discussions with clients?

Roy:            No it’s a great point and it’s something that Rose St Louis in a previous podcast backed up as actually in terms of one of the opportunities of the new way of working is that suddenly we’re getting into families’ houses more aren’t we?  And therefore you’ve got all of the various partners coming to these meetings and bringing the subject up that you quite rightly said of protection and examining the shortfalls is so much easier to do when you have all the people that are relevant at that meeting.  That it took a Zoom meeting to do it is a little bit sad but that’s where we are.

Lee:             Well that’s a really interesting point because I never saw clients on their own.  Apart from very rare occasions, I never saw married couples on their own.  Now there might be a health reason or particular reason in that particular review meeting one or other didn’t come but actually that was incredibly rare in the way that I ran my practice because I think we don’t get the same context to your client discussions if only one partner is there.  You don’t get to explain to both parties that, “If something did happen this is what would happen, this would be the process, this is how we deal with it for you.  These are the contact numbers,” or we used to introduce other members of the team.  There’s all sorts of stuff we did so for me it was really crucial and actually often we would see extended members of the family because they were becoming trustees of trusts and there were all sorts of things that were happening or maybe they were going to be beneficiaries so there were sometimes multi-member family meetings very deliberately in my practice but those are hard to run and you need a certain amount of confidence to be able to do it.

Roy:            And also there might be childcare considerations so sometimes the practicalities of – I guess many advisers will see people during work hours where it might be that that person works around the corner and the partner’s at home with childcare responsibilities.  It’s not always that easy to get in so actually the Zoom revolution has helped in that respect to raise this point.

Lee:             Obviously, I think definitely and long may that continue actually because I think – my personal feeling is that we’re never going to quite go back to normal in terms of the way we even talk and interact with our clients, not that I do that.  I think it will be a mixture of face-to-face and perhaps more of the review stuff will be done digitally and electronically over Zoom or whatever method people are using.

Roy:            Now you and I are a rarity in many ways but let’s stay on work – the work notion, in that we know wealth managers, we know protection advisers, we know mortgage advisers.  I mean, as you know, both our practices, you know, cover all of those areas but our industry generally is a siloed industry isn’t it?  You’re a wealth manager or you’re a protection adviser or you’re a mortgage adviser or you’re a PMI adviser or you’re an employee benefits adviser etcetera, etcetera.  When you talk to, you know, lawyers and accountants which I guess are our closest things to cousin professions, they don’t really have those lines of demarcation in the way that we do.  Yes, they have specialisms but they always seem to be a bit more joined up.  Would you say that’s a fair challenge to our industry but probably more importantly, how do we break down these silos?

Lee:             Okay, so there’s two questions there.  One is, I think you’re right in that the legal profession perhaps is the closest to looking like us although it is quite different.  I think they do have silos to a big degree.  They have, you know, they have private client services, they have conveyancing services, they have litigation etcetera, etcetera but what they seem to do very, very well within their practices is signpost internally, to use that phrase.  So if, you know, I’ve lost count over the number of years when I’ve founded businesses and invested in other businesses and all sorts of stuff, you end up speaking to two or three lawyers from the same firm in the same meeting and we could be saying the same.  You could have your wealth manager, you could have your pensions specialist and you could have your mortgage or protection specialist or whatever in those meetings.  So I think there is something in that.

I think sometimes it’s about cost.  Solicitors, you know, their costs are always going to cost.  They’re very confident in charging them and if you end up with three solicitors in the meeting you end up paying for three solicitors in that meeting.  I think there is something around us and our value proposition that we’re a little bit less confident sometimes about what we could charge but I think we need to get better at it and if we don’t have the experience in-house, we need to be, you know, doing that signposting that we talked about – working collaboratively to make sure the client is being looked after.  So I think we need to work on it.  I think we are seeing signs of an improvement but I think, you know, and you look at the work that you guys are doing in IPTF and look at Johnny Timpson and Rose St Louis – all these people that we know and respect and understand are pushing the message, we need to get that message out more or something because I think collaborative working, i.e. signposting amongst each other, brings benefits for everyone – not least the client.

Roy:            Yeah.  No, I completely agree. I guess the other area that we should mention quickly is business protection.  I think in many ways society has changed its attitude towards protection because of examining its own mortality and morbidity due to Covid and it’s very easy to say, “Well that’s changed individuals’ attitudes.”  We certainly at my company have witnessed that on the business protection side.  Is this again an opportunity because wealth managers will tend to look after maybe people who run businesses, own businesses, maybe slightly higher up in businesses just to the nature of their wealth to, you know, really look at their books and look at the people that they have and talk to them about business protection in particular?

Lee:             Absolutely.  If they haven’t, they should have done.  You know, it’s – I think absolutely.  That was, you know, if we talk about commercials for a second, that was a very lucrative part of what we did.  Not only was it right to do it, but actually it was a good part of our income and we did deal with lots of, you know, company directors, company owners, entrepreneurs etcetera so things like key man cross option agreements and all the other stuff that we know goes on, we were very, very active in and quite rightly so because we talked about transferring the risk from a family to an insurer.  Well you’re only talking about the same to the business and by extension of the business because many entrepreneurs’ businesses are very wrapped up in their family, you know, we know that it’s almost indistinguishable at times so it’s just an extension of looking after the family and looking after the business as well and who, you know, if you think why wouldn’t you want the widow of your business partner or widower of your business partner to receive a commensurate amount of money in the sad event or catastrophic event of the loss of their husband or partner or wife or whatever it was, from that company?

That’s just good company governance and I remember in the earliest days of my practice when money was really tight, one thing we never cancelled were those protection policies.  I think people – if they’ve got the right moral compass in them, they will have those policies and never let them go so advisers should be advising them absolutely.

Roy:            Fantastic advice.  Before we let you go Lee, we’ve spoken today a lot about collaboration, silos, breaking them down, signposting.  There might be quite a few of our listeners thinking, “That’s great, get that, yes we should be doing it.”  I guess the question is, how do we do it?  How do we bring our industry more together?  What are the obvious places that a protection adviser listening in or wealth adviser or mortgage adviser, what should they be doing next?

Lee:             Well I think they need to reach out in whichever shape that is.  They need to engage in debate, you know, it might be that if, you know, if they’re getting referrals from a solicitor for instance which we know happens, I’m just using that as one example, it may well be that that solicitor is also recommending investment clients or financial planning clients to another adviser who does that kind of work.  Ask for that introduction.  Look at what the professional bodies are doing.  Look at what IPTF is doing.  You know, look at what’s going on in Octo, sorry, slight plug but look at what’s going on in Next Gen, look at what’s going on in PFS Power, all these places that you could look to connect with people.

And here’s something that I used to do.  I occasionally used to go to law conferences.  I wasn’t a lawyer.  I used to pay to go to law conferences and I would meet lawyers at them and it might just be that wealth managers who are looking to get better at this should perhaps be going along to protection conferences.  Now simply – and at the moment it’s easier.  You’re just sitting in front of a screen.  You don’t actually have to travel to wherever that conference is and vice versa, perhaps protection people should occasionally come along to wealth manager conferences just to soak up the atmosphere, say hello to one or two people and begin to form relationships.  Now those are fundamental networking issues.  I would say absolutely get involved with what the IPTF is doing and all these other bits and pieces.  It is very likely that your client may be using another adviser because you can’t satisfy that need.  Ask your client.  You’ve got the best relationship with them, just say, “You know what, I know I look after your life insurance and your private medical insurance,” and whatever else it might be.  “Who is looking after your pension?” for instance.  “Would you mind making an introduction?”

Roy:            No, that’s great advice and I really would encourage anyone listening who hasn’t looked at Octo to look at it because it’s a great organisation.  But I think the call to arms here is – as an industry we need to talk to each other more but as you’ve said, the opportunities are there and there are some great conferences.  You know, I’m lucky enough to attend protection ones but equally I attend lots of wealth management ones so go to each other’s conferences.  There’s – that’s fantastic advice.

Lee:             Do you know, Roy, here is a thing.  Maybe these conferences that you and I get asked to help form the agendas sometimes, you know, we’re on the – you know, I sit on three different conference working parties, this is a failing of mine.  I’ve never suggested to the organisers, “Do you know what, wouldn’t it be great if we had someone along or a session on protection or on mortgages or something?”  In what’s a relatively – nah, there may be all sorts of commercial reasons they might not want to do that but we should be asking that question because the more we can bring people together into the same environment the better it’s got to be.

Roy:            Yeah and I totally concur and I would say for any organisers of protection conferences listening to this podcast, do the same, let’s get some of the wealth guys along as well.  I mean, this is a complete no-brainer guys.  Lee, thank you so much for your time.  Your insights and perceptions as always are phenomenal.  Next time Kathryn is going to be talking to Matt Rann and they’re going to be talking about cancer insurance and specifically bowel cancer.  If you’d like a reminder of the next episode, please drop me or Kathryn a message, go onto social media the usual ways or visit our website, www.practical-protection.co.uk and most importantly, don’t forget if you’ve listened to this as part of your work, you can register for a CPD certificate as well.  Just leaves me to say, Lee, thank you so much for your time.  I know it’s very precious but I think your call to arms here is very welcome and have you’ve got one last message for our listeners?

Lee:             Yeah, it is don’t ignore protection.  Don’t feel it’s beyond you and if you feel it is, reach out and find someone – someone like yourself, someone like Kathryn or the many others that are willing to help.  It is a fundamental part and I say that from personal and professional experience.  It’s for the wellbeing of the family so don’t be put off by it.  I’d like to say thank you for having me on.  It’s been a pleasure and a privilege.

Roy:            Brilliant, thanks Lee.

Don't Forget Protection

Hi everyone, this week Roy interviews Lee Robertson from Octo Members. Lee and Roy have an extensive chat about wealth management, protection insurance, signposting and more.

Lee has built a platform that allows advisers, from many areas within financial services, to join together to share their knowledge. This private community is focused upon bringing together experts who can discuss best practices, that can generate respectful debate and practical tips for action.

The key takeaways:

  1. Gift inter vivos and joint life second death policies can be an integral part of effective planning for inheritance tax.
  2. Protection used to be the first building blocks of a financial plan, but it’s not seen to be as interesting as other parts of wealth management.
  3. The need to challenge client’s mindsets of the financial needs for the whole household.

On the next podcast I will be back with Matt Rann and we will be chatting about cancer, especially bowel cancer. We will be chatting about early warning signs, potential treatments and what this can mean if you are trying to support someone to get protection insurance.

Remember, if you are listening to this as part of your work, you can claim a CPD certificate on our website.

Roy:            Hi everybody, this is episode six of season three.  I’m Roy McLoughlin and I’m delighted to have Lee Robertson from Octo Members with me.  Hi Lee!

Lee:             Hi Roy!

Roy:            Today we are going to focus on wealth management and protection in particular and the intricacies of both those worlds.  This is the Practical Protection podcast.  So Lee, how are you?

Lee:             Listen, I’m very well indeed, thank you despite everything that’s going on.

Roy:            Yes, yes, strange times aren’t they?  So let’s start off with a bit of background because I’m conscious that most of our listeners on the protection side – they would have heard of your reputation I’m sure but won’t know you completely.  Do you want to give us a sort of quick potted history of who you are firstly and then we’ll go on to Octo?

Lee:             Yeah sure.  Lee Robertson, Chief Executive of Octo.  I was a practising adviser in one shape or another for 30 years.  A couple of years ago, 2018, I sold my majority shareholding in the practice that I’d founded to the people who worked there, my co-workers, because I had an itch I wanted to scratch which was to set up Octo – amongst lots of other reasons of course but that was one of them.

Roy:            Excellent and what sort of people belong to Octo?

Lee:             It’s a broad cross section, almost 3,000 members, all financial services professionals covering wealth management, protection, mortgages, fund sales, fund management, compliance – no members of the public – marketing people, but no members of the public, no press unless they’re working with us and no regulators.  So it’s retail financial services practitioners in which ever discipline they sit within financial services.

Roy:            Marvellous.  What would you say your first experiences of protection were all those years ago?

Lee:             Well funnily enough, there’s two firsts – there’s two firsts.  One is professionally and one is personally.  Professionally I came into financial services, like many of my generation, almost by accident.  I came in having left the armed forces – I was going to join a Government department but they were mucking around.  It was the usual reluctance to change which is one more misnomer for cutting back and my start date kept getting delayed so I needed to earn in the meantime so I went into direct sales with Allied Dunbar, you know, great name I thought.  What did I know?  Actually, funnily enough the training was fantastic though it was mainly sales training more than anything but they were very heavily into protection and I think the founders of Allied Dunbar were also the founders of the other one – I can’t think of their name but it was very much about critical illness.  It was South African, it was Mark Weinberg so critical illness was one of their key drivers in terms of product set so that would have been professionally.  On a personal basis, Michael Allister up in Scotland was a Cooperative Insurance industrial branch salesman so I kind of grew up with insurance in the family if that makes sense and we needed it.  My father, who was in the building trade, had an industrial accident and if it hadn’t been for the insurance I think we might not have fared as well as we did.

Roy:            Oh right, so something happened to you at quite an early age which actually brought insurance right home, which sort of comes onto, you know, the subject we talk to a lot of our people about which is how important do you think these real-life studies are actually, you know, real-life anecdotes in terms of people having belief in a product?

Lee:             You know, you can only go from personal experience.  I think it’s incredibly important, you know, I come from a military background, people sadly die.  Also in your formative years, to be around something that’s almost, you know, it’s intangible, it’s an insurance, you don’t know what it is but the fact that it helped the family so deeply and profoundly at that time is really important. Though of course as you progress through a professional career and despite being, you know, heading a practice where I, you know, we had discretionary permissions, we were seen as quite investment-led although we never were, we were financial planning-led but we always, always made sure that we were offering protection as part of the product set.  So you – or the service that we offered – so it was incredibly important and we saw really deep, profound value in what happened and how it helped some of our clients so I think the long answer to a very short question Roy, I think personal experience is really important, personal stories, back stories are very, very important.  But also stories of clients which is perhaps the wrong way to describe it – but to see the way it’s helped at the most difficult times is both humbling and uplifting.

Roy:            Yeah.  Interesting you mentioned Allied Dunbar.  There’s, you know, much maligned by some but actually to give them, you know, credence, a lot of people that started off there were very well educated in terms of protection because the training there I hear was second to none and that’s very true of a lot of direct salesforces in the 80s, 90s, early noughties.  Do you worry that part of the industry’s problem with protection is that there isn’t that training so much anymore because those sort of companies aren’t around?

Lee:             You know, I think so.  It’s a really good question.  I was thinking about, before I came on with you, I was thinking about, you know, we were talking backstory and history a second ago, I was thinking when I grew up there was Scottish Widows and Standard Life and there was Life Association of Scotland and Scottish Amicable and so I grew up in a country that obviously believed in insurance and probably because all these companies grew out of military campaigns and that kind of stuff to look after soldiers.  But what it did was, I think it gave the sector or the industry as it was then, masses and masses of experience and resource to draw upon.  I mean, there used to be technical helpdesks, there was lots of training, there was lots of getting together to talk about these issues in a way that only really seems to happen now about investments and funds and I think platforms for me, you know, investment platforms were one of the key moments in wealth management or independent financial advice or financial planning in terms of being able to talk to clients and give them real-time information etcetera, etcetera.

But what I think – one of the things that also happened at the same time was advisers or – not all advisers of course but many advisers got incredibly interested in the investment bit and less interested in the other bit.  So I think it is a shame that so many of these life co’s have gone, have merged, have cut back on the tech desks so the message perhaps isn’t getting out as strongly as it did in my formative years, so yeah.

Roy:            Yeah, I mean a great example of that, I don’t know if you agree, is inheritance tax planning.  I remember going to endless courses on inheritance tax, mainly run by some fabulous insurance companies and that sort of disappeared a little bit, you know, away. Yet one could argue that inheritance tax planning now is as important as it ever has been.

Lee:             Yeah, at least as important.  The nation has, whilst it may not feel like it at the moment, but because of property values etcetera, etcetera, the nation has become or certainly lots of the clients that are served by advisers have become much wealthier, you know, they’ve seen property inflation at rates that are unbelievable actually so money is passing down through generations.  There are many successful businesses, all sorts of succession planning going on so I agree with you.  I think inheritance tax is really important now in a way that perhaps it wouldn’t have been before.  Successive budgets mean more and more people get caught by it so the planning around it has got to be fundamentally important.

Roy:            And, you know, for many of our listeners that maybe haven’t gone into inheritance tax planning in that way before, is there an image sometimes that inheritance tax planning is all about wealth management planning and not so much about protection whereas you and I know that protection could be an integral solution?  Is that a fair challenge?

Lee:             I think, you know, often we end up talking in generalisations but I think it is a fair challenge.  I think one of the things that struck me coming from a working class background Scottish family is we tended not to talk about money whereas when I became a financial adviser and then latterly a planner, what I realised was people with money talk about money a lot and interestingly those with money talk a lot about succession planning and they’re willing to address these issues and I remember being really quite horrified sometimes when people would say to me in meetings, “Oh yes but Granny’s going to die shortly and she’s going to leave me X.”  I was like, “What?  How do you even know that?  You’re planning your Granny’s death almost,” and that was the way I addressed it in my own mind but of course that wasn’t.  It just meant they had family discussions and they knew what was coming and they’d done lots and lots of proper planning.

So going back to the point, I think it is fundamentally important, people aren’t addressing it as well as they might do.  Often the solutions that you see can be quite engineered using investments and different sorts of, you know, shared portfolios and aim portfolios and all sorts of bits and pieces whereas I think good old fashioned, you know, gifting to vivos – there’s still a lot of use and value in those types of policies for a certain outcome in a way that investments sometimes don’t give you.

Roy:            Now we’re going to come onto the attitude of the wealth manager industry protection shortly but on this particular subject, do you perceive or do you sense that there’s an element of some of the wealth managers thinking, “Yes, I know that protection is a solution to part of IHT,” and you’ve mentioned gifting to vivos and obviously the traditional joint life second death policies but I think that, you know, getting this insurance is harder for these people because they tend to be older therefore, “I’m not going to do it,” and that may be the problem is in our mind rather than looking into it as in is there a barrier to this advice because there is a perception that getting protection is hard?

Lee:             I think so.  You know, there are less providers now so there’s a good starting point.  As we’ve said, there are less providers.  It is less readily available perhaps in the adviser’s mind.  You, because of your experience, might argue differently that it is still available but I also think there’s a familiarity thing.  When I was – basically came into the sector, we never didn’t discuss protection.  It was part of what we did with our clients.  In fact, I am on record as saying I used to think it’s the first building blocks of a financial plan long before we really spoke about financial plans.  But as people did less of it, as companies retreated from offering it, it begins to drop out of the mindset.  Now, you know, apologies for generalisations here but, you know, whenever you talk about a subject you end up straying into them.  So I think as we talk about it less and we do it less and we look for other solutions and other – and the providers retreat a bit, you become less familiar with it and this is a rubbish analogy but it’s a bit like, the hardest bit about going to the gym is actually putting your kit on.  Once you’re there you enjoy it and it’s the bit the same I think – and apologies for the analogy, but I think it’s the bit the same with protection.  Unless you’ve put the kit on and start doing the job, it’s just too easy not to do it.

So I think as people retreated from it, it became easy not to talk about – not to do it.  The skillset – and in protection the skillset is really high, your skillset drops off, you know less people, you know less underwriters whether, you know, there are less technical helpdesks to pick their brains etcetera, etcetera – so it’s easy just not to talk about it and let’s talk about the sexy stuff which is your portfolio.

Roy:            Yeah, no I think that analogy not only is a brilliant one but I think it’s spot on because it’s something that I hear quite a lot.  I mean, the elephant in the room here I guess is – and you’ve alluded to this, a lot of wealth managers started off doing quite a lot of protection which is in a way strange and they always tell you that within minutes but have sort of almost, yeah, have decided not to put that gym kit on and gone off and done other things.  So it’s not that they haven’t experienced protection but yeah, maybe they’ve become rusty or, you know, there are other reasons as well but I guess one of the central questions to someone like yourself with the experience that you’ve got is do you think that there’s an element of people where there’s – almost protection is something that’s, I don’t know, not seen as integral and is almost, you know, that too posh to protect attitude with some?

Lee:             Listen, I don’t doubt for a second there are some that are too posh to protect, you know, and if you look particularly up the scale you can definitely see it.  You know, I used to regularly pick up clients from private banks and no one had spoken to them about the protection, no one, and yet they had debt – high debt levels as well as high asset levels, they had family obligations if something happened to them and nobody had ever spoken to them about the most basic thing which was to transfer the risk from them personally to an insurance company of some catastrophe happening.  So I think I’ve got first-hand experience of that.  There are definitely organisations out there that feel that they’re too posh to protect.  What the reasons for – we’ve covered some of them, I think there are other reasons but I think definitely too posh to protect is a phrase that I use and it’s got a grip of certain organisations and it’s a crying shame actually.

Roy:            Now, whilst one might understand that attitude and, you know, we can question it all day long, I think hopefully one of the solutions has been the advent of signposting that’s come along and obviously that can have some quite revolutionary results, you know, if that is the attitude out there.  Signposting has always been here.  You and I have been signposting for years – that we didn’t call it signposting is irrelevant but it suddenly is the flavour of the day.  Signposting in particular with protection in mind, do you think that could change the view of some of those people in the wealth management side?  As in, they don’t want to do it themselves but they should do it and then they go and find someone that could do it on their behalf?

Lee:             Listen, I think so.  If you’re not willing to do it yourself, you’ve identified hopefully through your career – your time spent with your client that there’s a requirement for protection but you have neither the time or the confidence or the skill anymore to do it, then I think you are obligated, you know, to go and find someone to help you and signposting is just – as you say, we didn’t use to call it signposting but it’s a great way of working collaboratively with an adviser who specialises in that area in a way that you no longer do, to make sure that your client gets the right outcomes and outcomes is one of those words – the regulator likes it but actually it fits here.  A good outcome for a client is to be well-insured and to transfer the risk from them personally and their family or their business or whatever it is – from themselves to an insurance company for a relatively modest cost.  They can do it themselves.  I think they are obligated to find something to help them.

Roy:            Yeah, it’s strange isn’t it?  Since the IDD has come in and this, you know, this requirement to do your 15 hours, I’m sometimes sensing that some people are saying, “I’ve done a course, I’ve done my 15 hours, now let’s get on with our lives.”  Is that a little bit the wrong attitude by some would you say?

Lee:             Yeah.  I’ve not noticed that as much but you’re perhaps closer to it but I think it is wrong.  I think to be a good financial planner in whichever part of the sector you are in requires more than 15 hours.  It requires lifelong learning and the very best people that we know, yourselves included, do this all day every day.  You know, not just formal training to tick some CPD thing to keep your qualification up and get your statement of professional standing next year, it’s because you understand that it takes a huge amount of effort to get it right and things change all the time.

Roy:            I guess the other thing about signposting is that – and this does need more publicity, is signposting works both ways of course.  It’s not just potentially the wealth manager giving the protection adviser business, it can be the other way around as well.  So what would you say to protection advisers, which would be a vast amount of people listening to this currently, are the reasons for maybe thinking about referring business the other way as well?  I’m just thinking about captive audiences.

Lee:             Yeah, obviously the very best relationships work as a two-way basis don’t they?  Mutually beneficial, where you can work collaboratively to get the right outcomes, I’ll use that word again.  I almost told myself I wouldn’t but, you know, it just fits here.  So I think the very best outcomes come from working collaboratively and just as I’ve described some financial planners or wealth managers should be looking to collaborate with people for protection, just the same, protection advisers may spot opportunities where people at the most basic level just using a very simple example, aren’t using the right set of attributes they should be etcetera.  They should be looking to collaborate with people that collaborate with them to help address those issues and get better outcomes on that side.  That way, you form a proper business mutually beneficial relationship where you like referring to each other, you build confidence in each other and you understand that you’ve both got the client’s interests at heart.

Roy:            Would you also presumably throw the mortgage market into that equation as well?

Lee:             Absolutely.  We used – in my case, we did mortgages for a while but we realised that it took a lot of time, it took a lot of specialist experience, it took a lot of – interestingly, maybe it’s changed a bit now but it also took a lot of personal relationships with lenders.  Lots – and I think this is the same in protection, sometimes it’s as much who you know as what you know at times.  You just need a little bit of help to get things over the line or to explain if people have a particular medical condition or something and I think that’s the same on mortgages.  So in our practice, we stopped doing mortgages and we had – in effect we were signposting our mortgages to mortgage specialists.

Roy:            Exactly.  Yeah, no it’s interesting, signposting those of us who have been around slightly longer – has been around – I’d also throw private medical insurance into that as well of course.

Lee:             Yeah.

Roy:            Let’s talk a little bit about more current issues.  Covid, I mean it’s completely changed the protection world as I am sure you’re aware.  What’s it done to the wealth management world would you say?

Lee:             What’s it done to the wealth management world?  I think it’s – there’s lot of things and actually with Octo we can see a lot of it ‘cos we talk about it all the time but what it has done it’s definitely accelerated the adoption of technology.  You know, I used to have this discussion in my practice all the time with the financial planners about why were we dragging clients up to town?  We were based in the City of London.  Why were we dragging our clients up to town for a nice cup of tea and a biscuit to tell them things were largely the same as it was last year?  So we’re taking three hours out of their day or whatever it was and they always used to push back on, you know, “They want to see us, they don’t want to do Skype or Zoom or whatever.”  So that’s been a big change that the adoption of technology has definitely moved forward.

I think retail advice across wealth management, financial planning, mortgages, protection are to be congratulated on their – the way they’ve dealt with this crisis.  I think they have adopted and adapted really quickly new ways of working, new flexibilities, new ways of communication and they are to be commended.  I think they’ve done it in a way that many of the other professions haven’t so they are definitely to be commended.  So I think – what’s changed?  I think working hours have changed, I think places of work have very obviously changed and I’m not even sure it will ever go back to the way it was.  I think there’s more flexibility in the workplace which – financial planning or retail financial services –because your audience is broader but, you know, I think they have an opportunity to work flexibly in the way that perhaps other professions don’t.  You know, doctors sooner or later will have to see patients etcetera so I think those are the big changes I’ve seen.  The introduction of technology, of new ways of working, of new places of work, however that plays out and particularly in flexible working which suits I think the financial planning and protection and mortgage community in a way that it may not suit other professions.

Roy:            Now, there’s a very interesting and very topical subject at the moment, particularly over the last few days, of diversity issues which are quite rightly coming to the fore.  You and I have been in this industry I suspect an equal amount of time and witnessed on numerous occasions the fact that there is an industry totally under-represented by females, you know, I mean you go to conferences and you go to talks and you just see advisers around you and the lack of females has always been a worry issue.  Do you think therefore the flexibility that you just alluded to, which is something that I think has been sort of thrown at me as a reason for sometimes it being difficult being an adviser in particular, do you think that the flexibility – let’s say opportunities that come out of this crisis are consummate with getting more female advisers involved?

Lee:             I hope so.  I mean, listen, I really hope so.  You’re right, we’ve probably been in the sector about the same amount of time.  We used to go to these conferences and if you saw a woman in the audience, it was a bit of a rarity.  You know, it really was and it’s great that we’ve moved on from there.  I think in my practice we have a policy – we used to do things like – not because it was forced on us but because we thought it was good business practice.  It’s good business practice to have a happy, motivated team.  I like women in business but I think they give a very different perspective to men.  Interestingly, despite being ex-military and ex-rugby player, I’m not a massive fan of conflict.  I try to avoid arguments wherever possible by being collaborative so often I have to be quite, you know, I kind of wander around the point hoping somebody will get the point I’m trying to say.  Having women in the business, I find – another generalisation – but they can be much more direct and I used to like having women around me that way.  I think they think differently, they act differently, they are less inclined to, you know, men go from zero to 60 very quickly there’s all sorts of stuff in there.

But we used to do things – and I’m conscious I’m talking a lot here, but we did things because it was good business, not because we felt there was some imperative to do it.  You know, we used to do things like we used to shut between Christmas and New Year but we didn’t deduct that from staff holidays because it’s a really important family time.  If kids had sports days, we used to give that day off or half day off if that’s what they wanted and we didn’t deduct that from holiday.  If there were children and we had a – I had a team member who one of her children had a medical issue, if there were doctors appointments, hospital appointments, that was never deducted from salary so – or from leave or any of that kind of stuff because it was just the way I felt I wanted my practice to run which was pastoral and collaborative and flexible.

Now move that forward to answer your question and I give a big shout-out to many of the inspirational women I have met along the way who were better financial planners than I was who were on the beach before I was with the IFP and all the other stuff and I’m thinking of Julie Lord and Marlene Outrim and others, Becky Taylor, you know, real inspirations, you know, they played off the men’s tee – using another sports analogy and didn’t ask for fear or favour and really demonstrated what they had to do.  But if we can have a more open, generous, flexible workplace as a result of Covid which encourages more women to enter financial services, to reach for the stars and become practice leaders which many of them are now already, then that’s surely got to be a good thing for our sector.  Surely, you know, it’s just good business.

Roy:            Yeah.  I mean the great news on the protection side of the fence is that this is happening more.  Recently, Open Work have announced that 36% I believe of their new intake are female advisers so we are going in the right direction.  There’s a long way to go and of course diversity is across lots of different mediums but I think the flexibility angle which is something that has always been thrown at the industry in the past will change because of Covid as we’ve said so, you know, hopefully there is some massive well-timed progression there as well.  So that’s good.

Lee:             I do have a caveat, Roy, though.

Roy:            Yeah.

Lee:             And my caveat –

Roy:            We like a caveat!

Lee:             If we want more people to come into financial services from diverse backgrounds –

Roy:            Yeah.

Lee:             Be they women or from the BAME community or, you know, LGBTQ+ or whatever, we’ve got to stop this nonsense that I see all too often on social media and below the lines on our trade websites where someone has an opinion which is a personally-held opinion and then they get beasted for it just for having an opinion.  Now, maybe I’m just seeing it through sort of white male eyes but largely it’s women getting the beating.

Roy:            Yeah.

Lee:             They have an opinion or they have a viewpoint which they are perfectly entitled to have.  It’s based on their personal or professional experiences.  What they don’t need to do is have people that look like us – I’m not saying we would, in fact you and I know we wouldn’t, but people who look like us immediately jump on them and give them some kind of digital kicking just for having a personal or professional point of view.  No wonder at times women despair of our sector.

Roy:            Yeah.

Lee:             It’s a – I get quite angry about it.

Roy:            I totally concur.  There’s no patting our industry on the back yet, there’s a very, very long way to go.  Let’s go back slightly to the wealth management side of things.  Talk to any wealth manager and within seconds they will all mention cashflow models.  Okay, it’s just something that rolls of the tongue as you well know and there are some fantastic models out there.  I don’t know if you agree, but the cashflow models that I’ve seen, as excellent as they are on the wealth side are still seemingly lacking something on the protection side and what seems strange to me here is that we’re talking often about things going wrong so for our listeners we will use something called a black swan event which is used to basically model a stock market crash when you’re doing a cashflow model and yet something going wrong could easily be someone becoming ill.  Do you think cashflow models, whilst they claim there’s some protection in them, still need developing and I’ll throw in a sub-question which is, is that also an attitude that needs developing so that things going wrong in peoples’ lives are not just stock market crashes?

Lee:             Yeah.  So the short answers are yes and yes but I think they do need more developing.  When used well, cashflow modelling or lifestyle financial planning – however people use – whichever nomenclature that you use, is incredibly powerful with a client but it’s got to take into things more than accumulation, decumulation, investment growth, investment return etcetera, etcetera.  It’s got to take in the potential and the very best advisers do this, you know, Prestwood when – I’m going to mention Prestwood.  Prestwood when used well models this incredibly well but there are other systems out there which do address it but I think it comes back to the familiarity thing again.  These are difficult discussions to have with clients.  To say to a client, as I was taught, to say to – you’ve got a couple in front of you and you say to the couple and particularly, you know, the non-breadwinner in the couple if there is a non-breadwinner is so – or the primary caregiver or however you describe it, “If your partner wasn’t here tomorrow and that money stopped, how would you cope?”

Those are big, important, difficult discussions to have with people and clients can get very emotional, they can get quite disturbed, you know, so I think some advisers – some, a generalisation again, have backed off from those discussions and because lots of these software modelling tools are built on feedback from advisers, if they’re talking about it less, there’s less input going into it and that’s a really broad generalisation I know.  I think the very best of them deal with it well but how many advisers are confident enough to have – and professional enough to have those discussions which are very deep, meaningful, disturbing discussions with clients?

Roy:            No it’s a great point and it’s something that Rose St Louis in a previous podcast backed up as actually in terms of one of the opportunities of the new way of working is that suddenly we’re getting into families’ houses more aren’t we?  And therefore you’ve got all of the various partners coming to these meetings and bringing the subject up that you quite rightly said of protection and examining the shortfalls is so much easier to do when you have all the people that are relevant at that meeting.  That it took a Zoom meeting to do it is a little bit sad but that’s where we are.

Lee:             Well that’s a really interesting point because I never saw clients on their own.  Apart from very rare occasions, I never saw married couples on their own.  Now there might be a health reason or particular reason in that particular review meeting one or other didn’t come but actually that was incredibly rare in the way that I ran my practice because I think we don’t get the same context to your client discussions if only one partner is there.  You don’t get to explain to both parties that, “If something did happen this is what would happen, this would be the process, this is how we deal with it for you.  These are the contact numbers,” or we used to introduce other members of the team.  There’s all sorts of stuff we did so for me it was really crucial and actually often we would see extended members of the family because they were becoming trustees of trusts and there were all sorts of things that were happening or maybe they were going to be beneficiaries so there were sometimes multi-member family meetings very deliberately in my practice but those are hard to run and you need a certain amount of confidence to be able to do it.

Roy:            And also there might be childcare considerations so sometimes the practicalities of – I guess many advisers will see people during work hours where it might be that that person works around the corner and the partner’s at home with childcare responsibilities.  It’s not always that easy to get in so actually the Zoom revolution has helped in that respect to raise this point.

Lee:             Obviously, I think definitely and long may that continue actually because I think – my personal feeling is that we’re never going to quite go back to normal in terms of the way we even talk and interact with our clients, not that I do that.  I think it will be a mixture of face-to-face and perhaps more of the review stuff will be done digitally and electronically over Zoom or whatever method people are using.

Roy:            Now you and I are a rarity in many ways but let’s stay on work – the work notion, in that we know wealth managers, we know protection advisers, we know mortgage advisers.  I mean, as you know, both our practices, you know, cover all of those areas but our industry generally is a siloed industry isn’t it?  You’re a wealth manager or you’re a protection adviser or you’re a mortgage adviser or you’re a PMI adviser or you’re an employee benefits adviser etcetera, etcetera.  When you talk to, you know, lawyers and accountants which I guess are our closest things to cousin professions, they don’t really have those lines of demarcation in the way that we do.  Yes, they have specialisms but they always seem to be a bit more joined up.  Would you say that’s a fair challenge to our industry but probably more importantly, how do we break down these silos?

Lee:             Okay, so there’s two questions there.  One is, I think you’re right in that the legal profession perhaps is the closest to looking like us although it is quite different.  I think they do have silos to a big degree.  They have, you know, they have private client services, they have conveyancing services, they have litigation etcetera, etcetera but what they seem to do very, very well within their practices is signpost internally, to use that phrase.  So if, you know, I’ve lost count over the number of years when I’ve founded businesses and invested in other businesses and all sorts of stuff, you end up speaking to two or three lawyers from the same firm in the same meeting and we could be saying the same.  You could have your wealth manager, you could have your pensions specialist and you could have your mortgage or protection specialist or whatever in those meetings.  So I think there is something in that.

I think sometimes it’s about cost.  Solicitors, you know, their costs are always going to cost.  They’re very confident in charging them and if you end up with three solicitors in the meeting you end up paying for three solicitors in that meeting.  I think there is something around us and our value proposition that we’re a little bit less confident sometimes about what we could charge but I think we need to get better at it and if we don’t have the experience in-house, we need to be, you know, doing that signposting that we talked about – working collaboratively to make sure the client is being looked after.  So I think we need to work on it.  I think we are seeing signs of an improvement but I think, you know, and you look at the work that you guys are doing in IPTF and look at Johnny Timpson and Rose St Louis – all these people that we know and respect and understand are pushing the message, we need to get that message out more or something because I think collaborative working, i.e. signposting amongst each other, brings benefits for everyone – not least the client.

Roy:            Yeah.  No, I completely agree. I guess the other area that we should mention quickly is business protection.  I think in many ways society has changed its attitude towards protection because of examining its own mortality and morbidity due to Covid and it’s very easy to say, “Well that’s changed individuals’ attitudes.”  We certainly at my company have witnessed that on the business protection side.  Is this again an opportunity because wealth managers will tend to look after maybe people who run businesses, own businesses, maybe slightly higher up in businesses just to the nature of their wealth to, you know, really look at their books and look at the people that they have and talk to them about business protection in particular?

Lee:             Absolutely.  If they haven’t, they should have done.  You know, it’s – I think absolutely.  That was, you know, if we talk about commercials for a second, that was a very lucrative part of what we did.  Not only was it right to do it, but actually it was a good part of our income and we did deal with lots of, you know, company directors, company owners, entrepreneurs etcetera so things like key man cross option agreements and all the other stuff that we know goes on, we were very, very active in and quite rightly so because we talked about transferring the risk from a family to an insurer.  Well you’re only talking about the same to the business and by extension of the business because many entrepreneurs’ businesses are very wrapped up in their family, you know, we know that it’s almost indistinguishable at times so it’s just an extension of looking after the family and looking after the business as well and who, you know, if you think why wouldn’t you want the widow of your business partner or widower of your business partner to receive a commensurate amount of money in the sad event or catastrophic event of the loss of their husband or partner or wife or whatever it was, from that company?

That’s just good company governance and I remember in the earliest days of my practice when money was really tight, one thing we never cancelled were those protection policies.  I think people – if they’ve got the right moral compass in them, they will have those policies and never let them go so advisers should be advising them absolutely.

Roy:            Fantastic advice.  Before we let you go Lee, we’ve spoken today a lot about collaboration, silos, breaking them down, signposting.  There might be quite a few of our listeners thinking, “That’s great, get that, yes we should be doing it.”  I guess the question is, how do we do it?  How do we bring our industry more together?  What are the obvious places that a protection adviser listening in or wealth adviser or mortgage adviser, what should they be doing next?

Lee:             Well I think they need to reach out in whichever shape that is.  They need to engage in debate, you know, it might be that if, you know, if they’re getting referrals from a solicitor for instance which we know happens, I’m just using that as one example, it may well be that that solicitor is also recommending investment clients or financial planning clients to another adviser who does that kind of work.  Ask for that introduction.  Look at what the professional bodies are doing.  Look at what IPTF is doing.  You know, look at what’s going on in Octo, sorry, slight plug but look at what’s going on in Next Gen, look at what’s going on in PFS Power, all these places that you could look to connect with people.

And here’s something that I used to do.  I occasionally used to go to law conferences.  I wasn’t a lawyer.  I used to pay to go to law conferences and I would meet lawyers at them and it might just be that wealth managers who are looking to get better at this should perhaps be going along to protection conferences.  Now simply – and at the moment it’s easier.  You’re just sitting in front of a screen.  You don’t actually have to travel to wherever that conference is and vice versa, perhaps protection people should occasionally come along to wealth manager conferences just to soak up the atmosphere, say hello to one or two people and begin to form relationships.  Now those are fundamental networking issues.  I would say absolutely get involved with what the IPTF is doing and all these other bits and pieces.  It is very likely that your client may be using another adviser because you can’t satisfy that need.  Ask your client.  You’ve got the best relationship with them, just say, “You know what, I know I look after your life insurance and your private medical insurance,” and whatever else it might be.  “Who is looking after your pension?” for instance.  “Would you mind making an introduction?”

Roy:            No, that’s great advice and I really would encourage anyone listening who hasn’t looked at Octo to look at it because it’s a great organisation.  But I think the call to arms here is – as an industry we need to talk to each other more but as you’ve said, the opportunities are there and there are some great conferences.  You know, I’m lucky enough to attend protection ones but equally I attend lots of wealth management ones so go to each other’s conferences.  There’s – that’s fantastic advice.

Lee:             Do you know, Roy, here is a thing.  Maybe these conferences that you and I get asked to help form the agendas sometimes, you know, we’re on the – you know, I sit on three different conference working parties, this is a failing of mine.  I’ve never suggested to the organisers, “Do you know what, wouldn’t it be great if we had someone along or a session on protection or on mortgages or something?”  In what’s a relatively – nah, there may be all sorts of commercial reasons they might not want to do that but we should be asking that question because the more we can bring people together into the same environment the better it’s got to be.

Roy:            Yeah and I totally concur and I would say for any organisers of protection conferences listening to this podcast, do the same, let’s get some of the wealth guys along as well.  I mean, this is a complete no-brainer guys.  Lee, thank you so much for your time.  Your insights and perceptions as always are phenomenal.  Next time Kathryn is going to be talking to Matt Rann and they’re going to be talking about cancer insurance and specifically bowel cancer.  If you’d like a reminder of the next episode, please drop me or Kathryn a message, go onto social media the usual ways or visit our website, www.practical-protection.co.uk and most importantly, don’t forget if you’ve listened to this as part of your work, you can register for a CPD certificate as well.  Just leaves me to say, Lee, thank you so much for your time.  I know it’s very precious but I think your call to arms here is very welcome and have you’ve got one last message for our listeners?

Lee:             Yeah, it is don’t ignore protection.  Don’t feel it’s beyond you and if you feel it is, reach out and find someone - someone like yourself, someone like Kathryn or the many others that are willing to help.  It is a fundamental part and I say that from personal and professional experience.  It’s for the wellbeing of the family so don’t be put off by it.  I’d like to say thank you for having me on.  It’s been a pleasure and a privilege.

Roy:            Brilliant, thanks Lee.

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