Hi everyone, we are talking about something that strikes dread within advisers… objection handling. Ok maybe not dread for an experienced adviser who has pretty much heard it all, but for people stepping into the protection space this can be quite nerve wracking.
Roy McLoughlin is back with me and we are discussing the common objections that he hears within the pensions space, and how these seem to mirror objections to protection insurance too.
The key takeaways:
- Common objections are, “I’m too young”, “It’s too expensive”, “It won’t happen to me”.
- The average cost of an income protection policy is £1 a day.
- You need to tailor your advice recommendation to match what the client cares about and there is a fine balance between disturbance and scaremongering.
Next time, I am speaking with Matt Rann for his first outing of Season 4. We are going to be chatting about accessing insurance when you are transgender. With us just having had PRIDE month, it feels like now is a good time to dispel some myths around service and potential terms of insurance.
If you want to know more about how to arrange protection insurance, take a look at my Protection Insurance in Practice course here.
Kathryn: Hi everyone, this is episode two of season four and today I have Roy McLaughlin back with me. Hi Roy.
Roy: Morning everyone, how are we all?
Kathryn: I think we’re all very, very good Roy and I’ll let you share your wonderful news right after we get through the initial jingles. So, today we are going to be talking about objection handling. The kinds of barriers you might face and what to do if you have a client that is really not taking on board what you are saying. So this is the Practical Protection Podcast.
So Roy, I know you’ve got some incredibly exciting news that I’m sure quite a lot of listeners would find very, very interesting, whereas I just went, “Ugh,” when you told me, but go on then, what would you like to share?
Roy: Well, I guess by the time this is published, we’ll either be out or in, but I’ve managed to just procure a ticket for Wednesday’s semi-final against Denmark, so some of our listeners will be envious and others will just go, ‘So what?!’ I get that.
Kathryn: I think quite a few people are starting to get really camaraderie with it now, so I think there’ll be quite a few people who go “Argh, I can’t believe he’s got that, the jammy so and so!” [Laughs]. But how are you? Bar the football? It’s been a while since we’ve had a chat. How are you doing?
Roy: Yeah, no, all is fine and all is dandy in the protection world and I’m starting to sense that our, I know we’re going to talk about objections in a minute, but our beloved subject of underwriting’s going to start getting a bit easier, so let’s hope that’s our green shoots in our own little world, isn’t it?
Kathryn: Absolutely. Well, for anybody who is listening who isn’t sure, I’m sure a lot of people will be, but in terms of the underwriting, the restrictions that have been in place with a lot of insurers due to Covid are starting to either be completely removed or at least lessened, which is absolutely fantastic. Something I think that we’ve all been really hoping would happen and yeah, it’s a really good thing. And something I will say to people as well is make sure that people that you’ve spoken to in the last year or so, if you’ve arranged them the insurance or if you’ve sort of like, had to say to them, “Well let’s just wait a bit,” get back to them as quick as you can because now is the opportunity to start really getting on board with these things.
So, over to objection handling. So, I think objection handling has to be one of the key things that I think a lot of advisors find confusing. So, it’s not a secret, I’m starting a new training course soon, this week, and obviously when this is going live, I’ll be on day two and hopefully everybody will still be entertained and engaged because the first session is two hours of compliance, so I do apologise to everybody who signs up to the course, it’s going to be, well it’s over and done with, gets it over and done with. But anyway.
One of the things that people said to me when I was doing a little bit of, you know, sort of like putting out some feelers is things like objection handling and what to do. And I think it’s hard because when you build a brilliant recommendation and you give all the details about what somebody needs, they might turn around and say to you, “Well, that’s all well and good, but it’s not what I want,” and I think that can be quite hard because an advisor will just like – one of the things I always say to people in the very first phone call, you know when we do our regulatory spiels and everything with us being telephone based, it’s like a script thingy that we have to do, make sure to say everything.
I always say to them, “No matter what, you’re going to tell me what you want, I’m here to tell you what you need and we’re going to have to either, we will either do what you need, or probably have to come to some kind of compromise as to what’s going to work out.” But I know good examples in the protection space, I think probably a lot of people listening would probably know that as well, but I don’t know how it works in like the wealth and the pension space Roy. I find that quite interesting as to do you really get objection handling? I suppose the wealth and investment side I imagine you maybe get some objection handling, but I kind of imagine – I know pensions, I just kind of imagine is as the thing, “Well, let’s just do it,” in a sense, but I’m assuming I’ve got that completely wrong. Yeah, I have got it wrong [laughs].
Roy: I only wish, I only wish it was that easy. Listen, things have changed in the pensions world, but having done this job for as long as I have, I would say that the – and it’s funny, we’ll talk about protection shortly, but the same objections just come round and round like Halley’s Comet and it’s the same thing people were saying to me 20 years ago, the same now. On pensions, I guess probably your biggest objection was always the either, “I’m too young for a pension,” or, “My property’s my pension.” Okay? And I still hear both of those things now.
On investments, you know, you’re trying to encourage people to save into ISAs and they might say, “Well no, all I want to do is save up for a house.” So, you know, it is cyclical but it’s the same principal and it’s the same psychological answer to objection handling in whatever strand of financial services that you’re in. And I think what’s really important for us advisors is to put ourselves firmly in the shoes of the consumer and think about what they’re actually saying when they’re making that objection. And sometimes, are they actually me the question that they mean?
Kathryn: No, absolutely, I think that’s a good one. I think one of the things that I do when I’m doing my training is again, from sort of like the start, when I’m training advisors, I always say, “When are you going to start doing your recommendations and things like that?” It’s like, what is the trigger? You know, with this consumer, what has made them be open to this conversation and start this conversation? And there’s usually, there is a trigger of some sort so, you know, it could be, like you said, it could be that they’ve got a mortgage and they’re suddenly thinking, “Right,” so it’s a case of, so how do we then change – if somebody is then, “Mmm, I’m not so sure I should ever do that,” and it’s a case of making it –well, I’m sure we’ll chat a bit more as we’re going along with this conversation, but it is about trying to make it relatable.
And I also think as well, you can go with the best recommendation in the world, you could do the absolute all-singing, all-dancing, this person’s going to be looked after for the rest of their life recommendation. It’s, touch wood but, you know, if the worst was to happen, but if the person doesn’t get it, then you’ve not done, in a sense, the job right as the advisor. But I think there are still some exceptions there, where we also need to give advisors a little bit of a break sometimes and I’ll come onto that a little bit later. But, as an advisor, I think that there’s – actually, just going back – so what kind of questions, Roy – what kind of questions are you thinking that people should be asking?
Roy: On pensions or protection or –
Kathryn: Well, anything. I know you were saying are the people asking the, you know, the right question of you as an advisor? How do you – so if somebody comes to you and so – I mean obviously, for me in the protection space, in a sense, it’s quite clear. If someone comes to me and says, “I want critical illness cover, I want to know that if something happens, my monthly bills are going to be paid,” and it’s like, “Well actually, we mean income protection, we don’t mean critical illness cover.” Maybe –
Kathryn: Maybe critical illness cover to some extent, but actually what you’re saying there is income protection, so let’s go back and talk about –
Kathryn: What these products actually are. So, I suppose for you, you know, what kind of things might the, you know, if I were to come to you for pensions advice and ask you something and what would you maybe, what are the kind of things that you would be sort of you saying, “Well actually, I think we’re starting this from the wrong mindset or something.”
Roy: Yeah. I mean, I think you’ve sort of just hit the nail on the head. People have got to relate to things otherwise they’re never going to engage. And if we just take pensions to start off with, the best way for most of us to relate to a pension is actually to look at our parents’ situation, okay? Because when people are in their twenties or thirties, or early forties, it’s likely that your parents hopefully are still around, are going to be in their, you know, sixties, maybe seventies and one of two things is going to happen. Either they’re going to be in a financial situation where they’ve got a good pension and actually, you’ll look at them as a son or daughter going, “Wow, that’s great, our parents are going to be well looked after in their retirement, I would like to be that when I’m that age, okay?” Or, conversely, you might have a situation where you’re actually starting to worry about your parents and you’re thinking, “I just know that they haven’t got enough money to retire on,” so you might have heard them say things like, “I can’t retire now, I’m going to have to put my retirement back,” or, “I’m really worried about what we’re going to live on when we retire.”
And again, if you think about that, the answer to that one’s exactly the same – you’re probably looking at yourself going, “I don’t want to be in that situation when I get to that age.” So, I think it’s always important to make any financial decisions as real as possible and there’s nothing more real than looking at your surroundings. And to your point, you know, a lot of people would approach you and I about protection because something’s happened to someone that they know. And, you know, it’s another reason why we should tell all our claims stories out loud. But, you know, think about putting yourself in the customer’s shoes. And also, before we talk at people, it’s really important to work out why someone would have an objection to something like a pension. So, for example, lots of people in their twenties will say, “I’m too young to take a pension out.” What you’ve got to think about is, “What do they mean by that?” and just explore what they’re really saying. And it’s probably that they just have forgotten the concept of compound growth and how the important years for a pension were when you were younger. So you have to steer them, okay?
And there’s an old phrase that’s much used over the years, but it’s as relevant now as it is ever before, which is ‘sell don’t tell’, okay? And I think sell don’t tell in any manner of financial services is still really important. If you tell somebody something, okay, well sometimes it’s bordering patronising. But actually, they’re not working it out for themselves. And another little tip I’ll give to all our listeners is, if you’re unsure that a client has understood what you’re explaining to them and I don’t care what the subject is – ask them to explain it back to you.
Roy: And I think that’s a really clever tip, because what I say to people is, “Look, if you can’t explain it back to me, the fault is with me –”
Roy: “It’s not with you, because I haven’t explained it properly.” And Kathryn, I’m sure you’ve been there, when they start explaining it, you realise what you haven’t told them and you get it straight away don’t you? You go, “Oh sorry, what I actually meant was that,” and then the client gets it as well and then actually you’re on the home straight so to speak.
Kathryn: Absolutely. I also think as well that that sometimes happens even more so with people who are already maybe in the financial services space as well. Because you kind of at first – kind of assume that they have sort of like a bit of a certain level of knowledge. So I kind of always, you know, really purposefully say to myself, “This person doesn’t know anything about protection insurance.” Or, I’ve had people come to me who are in the protection insurance space and then it’s a case of me explaining why I’m doing it a certain way compared to what they would have maybe traditionally wanted to do.
And it can be very, very, you know, that one can be really interesting because then you’re kind of having to balance between, “Right okay, I don’t want to talk to this person as if they don’t know anything, because they actually know quite a lot, but at the same point, they’ve come to me for a reason.”
Kathryn: And it’s important. But I think that goes on quite nicely to the next bit I was wanting to chat about, because I think with advisors there’s a really fine balance that we need to walk on, you know, between making people aware and hitting home how important these policies are and then obviously going into the scaremongering territory. I mean, there’s always this big thing, you know, where you’re advising – do not scaremonger. I think a good example of that is, you know, you can pose maybe some challenging questions to people and say, “Right, okay, if you didn’t have this insurance in place, you know, what do you have in place to be able to – if you can’t work, say for income protection, if you can’t work, what savings do you have in place, so that you can stay in your family home?” And –
Kathryn: You know, if you’re unable to work. So there’s things like that, instead of you can’t do the scaremongering which is, you know, along the lines of, “Your children and your wife are going to get kicked out of your house in three months’ time if you don’t do this.” You know, that’s quite an extreme example, but it is something to just make sure that people know.
Roy: Yeah, I mean, it’s really important that people get this because this is such an important point that they get the fact that a disturbance technique is absolutely fine and ethical and moral and there is no problem with using disturbance techniques. Absolutely. What you’re saying is that we shouldn’t be using scaremongering and I don’t think anyone left in this industry does. Well, hopefully they don’t. So the disturbance – you’ve just got to get your head round it and you’ve got to realise, particularly when you’re talking about protection, that we are talking about horrible things happening to people and you’ve got to be brave. And I think people will look at your reaction and they’ll see how you talk about it, to realise what your importance is and then how important it is to them. So great examples with – we’ve done lots of mortgage related podcasts, haven’t we?
And we’ve talking with several people about the, you know, if you just ask the protection question right at the end of the process, almost as an afterthought okay, the client’s looking at you going, “Well it’s not important to this guy because he’s asked it right at the end, so therefore it’s not important,” whereas I think the best mortgage brokers that deal in protection will bring it up pretty much at the start. So again, the client’s going, “Ah right, this is clearly important to this person, therefore it must be an important subject.” And I think that’s not a scaremongering tactic, that’s a disturbance tactic, but in a positive way, not in a negative way.
Kathryn: Yeah. Oh absolutely, I think, because I’ve had some people ask me sort of like in the mortgage space you know, with me doing this training and that, sort of saying, “Well, I’m just wanting to know how to bring the protection conversation in,” and to me it’s that kind of mindset for going you know obviously as an advisor just going, “If you’re doing a mortgage, you’re doing protection insurance, there’s no ifs or buts about it, you know, at the very least, you’re looking at the life insurance, it’s a massive debt, so it’s right up there.”
Kathryn: A straight statement, “I’m going to do your mortgage, I’m also going to do you the life insurance,” and it’s just straight away we’re getting it all sorted.
Roy: Yeah. I think the peculiarly, there’s a good word for a morning –
Kathryn: Yeah. I’m not going to try and pronounce that! [laughs]
Roy: I can’t spell it, so I’ll ask you to spell it. I think let’s say strangely. The Covid crisis has actually changed a bit of mindset here. I think that a lot of particularly some of the younger listeners out there, had this indestructibility part to them, you know, “It won’t happen to me,” and that’s – let’s face it, the biggest objection to protection is, “It won’t happen to me.” I think there can’t be anybody listening to this podcast who hasn’t been touched in one way or the other by this dreadful situation. But I think it has questioned our indestructibility throughout the age range.
Roy: Okay, and I think that this therefore gives an opportunity, I have to say, to be able to have that discussion in the way that maybe you thought that you couldn’t have before. But again, the psychological side of our business I think is fascinating. If that’s not prevalent in that broker’s head, okay, then that question’s not going to be asked and I think that it also leads us onto a subject that I know we’re going to talk about, which is assumption. Okay? And I think sometimes when I’ve spoken to and I’ve been –like you I’ve been round the country and spoken to literally thousands of advisors, the assumptions that the advisors make are sometimes the reason why protection doesn’t get sold. And I think that the two greatest assumptions on income protection, which is a subject after my own heart is, “Oh, don’t worry, he or she is covered by their workplace or he or she is covered by the State.”
Kathryn: Yes. They’re definitely the things that are obviously a concern.
Roy: Well you and I know factually that those assumptions are wrong, okay? That you’ve got to be able to go out and talk to people about why they’re wrong and give them the evidence that they’re wrong and actually, what I’ve just said was the blueprint for the 7Families campaign Because we were very, very aware of the fact that it was advisors that had those assumptions, let alone the consumer.
Kathryn: Yeah absolutely. But that’s the thing I was going to chat about next, you know, when we talk about case studies and obviously I know you were really, really involved with the 7Families and they’re absolutely phenomenal examples and it’s things that I – and I’ve said this before and I’ll say this again, to people who are listening, set the 7Families videos as training for your team and for yourself. Because they are incredibly powerful and it really hits home why something like income protection is so important. And I think that they – I wouldn’t say for people to necessarily show them to clients in a sense, as a sort of like a form of objection handling because again, we’re going into kind of maybe a bit of a – it depends, we could be sort of like going into – bordering –
Roy: Yeah. That’s fascinating. When we first designed the videos, I don’t think any of us really thought that we would be showing them to consumers but actually the opposite occurred, especially on the group side. And I’ve shown that video probably as many times as anyone else and I can say that as long as it’s presented and handled in the right way, actually it’s a very powerful video to show certain consumers.
Roy: I take your point there are some that you just shouldn’t and you need to think about it and you need to watch the videos and think about that, but I’ve certainly – to HR professionals, for example, shown that video on numerous occasions and coming back to my point, you know, the end of that sequence is, well, “What do you guys think that you do present in terms of long-term sick pay for your staff?” And when you get rooms of HR people putting their hands up going, ”Erm, not absolutely certain of that answer, but now I’m going to find out.”
Roy: There was an element of, “Well, I’m really glad I showed that video, because it took that for them to find out about their own, their own remember, HR procedures.” I’ve done it to insurance companies, I’m not going to name any to embarrass them but there are several insurers, I can tell you Kathryn, where we did training too and I asked them to put their hands up and tell me what their sick pay was and I can promise you there weren’t huge amounts of hands in the air. And as the people within our industry –
Roy: You know, we’re not telling anyone off for this, but this comes back to my assumption point. There’s an assumption that people know what they’ve got.
Roy: And actually, when we got them to dive deep into what they actually had, they kept coming up with this wonderful expression, ‘at my employer’s discretion.’
Roy: Okay? And if you haven’t heard ‘at my employer’s discretion’ guys, you should have, but will do, I can assure you. And that is what the little gem that is written into one hell of a lot of employment contracts, okay? And as an advisor, that is what you should be doing. You should be helping get the employment contract out. Now, I don’t know about you Kathryn, but ‘at my employer’s discretion’, okay, it’s firstly quite a nebulous term, but secondly, what does that really tell you? And I think that when you’re having a chat with someone about their protection, you should say, “What do you really think that means? Are there any examples? Have you got any anecdotes of people that have been off long-term ill and do you know they have been paid?” To which, most of the time, the answer is ‘no’.
Roy: There, you’ve disturbed, you’ve created the need and actually, as a by-product by the way, you sometimes get group business out of this as well.
Kathryn: Yes. Absolutely, the ability to suddenly develop group business is actually quite often in many ways, when you’re chatting about things. But now I’m completely the same, you know, one of the things we’ll be asking in our fact finds is, “Do you have any death in service, do you have any sick pay?” And you know, the majority of the time, it is maybe that somebody has a month or two, you know, obviously people in the public sector that’s it, you know, they tend to have a lot of sort of like six months or six months half, but you know, if it says ‘at my employer’s discretion’ then the conversation I’ve always ended up having with people and it’s kind of like a mutually agreed thing is that that’s probably nothing to rely upon. And you probably want to just ignore that in some ways when you’re doing the recommendation.
Roy: I think you should.
Roy: I think also what you should do there, another little sales tip, is start creating your own library. Most people now will work for a company where all of their HR is on a pdf, okay? And the thing to say to that person at that point is, “Don’t worry if you don’t know the answer. Can you send me the pdf, or your HR book, or whatever it is?”
Roy: And then gradually, because clients tend to hang around with clients, or refer to clients, you could build up your own library of course. And so next time you meet someone from that company, you could say, “Before we even start this, I know what your sick pay scheme is,” and hence my point, you know, that I’ve had people say to me over the years, “Yeah, but aren’t their HR people going to be a bit miffed that you’re looking into their booklet and they’re going to think that you’re trying to expose them?” Quite the opposite. Absolutely, what you tend to find is that sometimes they will say, “Why is this guy asking about this?” and then they might want to talk to you and I’d guarantee you guys, you get group business out of this, because they will tend to have a responsibility themselves and I think what an HR person’s absolute nightmare is, is not knowing the answer to that question, if someone’s off long-term ill, okay? Because you do need to know this and this segways completely into a subject that you and I have spoken on, on many of these on, which is mental health.
Roy: Because we both know that the two biggest causes of people being off work are musculoskeletal and mental health issues. So they’re going to be asked about this subject.
Kathryn: Yeah, absolutely. I think as well when we’re sort of like going into the objection handling side of things, how many – I suppose what some people wonder is, “Well, how many times do I go back?” So the kind of objections that we see, like you’ve said, is that, “I’m too young, it’s not going to happen to me, it’s too expensive, I’d rather spend my money on things that I can enjoy now, while I can,” you know, things like that. You know, it’s not necessarily the way that we want people to think. We know some people do think that way but I mean how much would you say go back? You know, how many objections would you take, before you sort of like think, “Right, I’m going to need to tweak what I’m recommending or particularly, this just isn’t working and this person just really isn’t listening.”
Roy: This always feels like the quickfire round of Question of Sport of objections because I can handle and answer all those objections that you’ve got. The point here is that I think we owe it to ourselves as advisors to know what the answers to every single point that you’ve just said is, okay? Right, we are professional financial advisors and we should know what all of those answers are and I’m sorry if we don’t, we need to go and find it out. That’s part of our responsibility and many people in our industry talk about the responsibility of advice [laughs]. Not least, the regulator. And you should know what all those answers are. There is help out there, this is obviously something you’re going to be doing with your course that we’re all looking forward to.
Roy: But, you know, there are insurers out there, there are different places that you can go and get help, but I think if you don’t know the answers to those quite basic objection handlings, one – you’re doing yourself a disservice, but secondly, you’re doing the client a disservice. And I’ll just go back a few sentences to why. Let’s say you let the client get off with the objection, “‘I’ve got it covered at work,” okay, and you don’t check, you don’t verify that that’s actually the case. And then that person is off for let’s say a year from work, okay? And you’re sitting down with their family and you’re thinking, “Ah. They didn’t have any cover at work and I put ‘N/A’ in the fact find, okay?” And N/A guys, is the worst thing you can write in any fact finder in any section, but certainly on employee benefits.
How are you going to feel about the fact that you should have just probed that, searched it, got that HR booklet and I think sometimes letting clients off with ‘N/A’ and, “Oh, I’ll come back to that later,” or “Don’t worry about that now, we just want to get on with the underwriting, we can go back and look at that,” is I would say firstly irresponsible, but how are you going to look that person in the eye if they have a claim? So I think you do need to think about the – not only the vagaries of objection handling, but also the consequences of not dealing with it in the correct way. And the other one that you’ve mentioned there that I’ll just quickly jump into is, because I’ve heard it from so many advisors and we did some research a few years ago alongside – I think it was Protection Review, about the perception of the average cost of income protection. And you might remember this Kathryn, but IFAs were saying, “Oh it’s over £100 a month.” Whereas as you and I know, the average premium in the UK is £31 a month. It’s a pound a day, okay? So if the problem was with us as advisors, we think it’s three times more than it actually is, okay?
Roy: Who’s doing the disservice?
Kathryn: No, absolutely. I completely agree with you. I had a little spark of an idea of something you were saying, oh that was it, so another reason. So when I was saying obviously about, you know, with advisors, it’s their job to be looking to make sure because you could have devastating consequences for the clients if you don’t do the protection side of things. Now I think on top of that as well, something that people need to be aware of and advice they really need to take on board is that I don’t think it will be long before there’s devastating consequences for advisors who haven’t advised in this area. You know, if you have been – if someone’s come to you and you’re an advisor and you’ve looked – you’re meant to be looking at all of their protection needs, you know, it’s that thing isn’t it, between being an order taker and being an advisor?
Kathryn: Someone comes to you wanting life insurance, you do it. “Wonderful, we’ve done our job.” That’s an order take, that’s not actually providing advice. So, if you’re an advisor, you’re advising all of these areas. Now whether or not somebody takes up every single policy that you recommend, that’s one thing, you know, obviously, but you should have it documented everywhere as to what you have advised this person and then what they have or haven’t chosen to go with. And like you say, if it suddenly has a thing in it saying, you know, not applicable in terms of like the employee benefits, is that a case of, you know, you may not remember a couple of years down the line what you meant by that. Is it that they don’t have it and you’ve checked with them and they don’t have it? But then if you’ve not then gone on and done income protection quotations and tried to advise on that side of things, have you really done a good enough job? If they are then unable to work, could they potentially take you and file a complaint and sue you? Because…
Roy: It’s not even just that though, it’s the looking them in the eyes if you haven’t probed it.
Roy: And look, the threat of regulatory action’s been around since I started in this industry and I think what the regulator will talk to you about is your duty of care. I mean, of course you should be doing this, but I would say let’s take the threat of being sued out of this conversation for a minute. It’s just the, “How do you deal with that family?” How do you deal with the widow whose husband’s just died or wife’s just died and says to you, “But why didn’t you cover their debt here that we’re now saddled with?” Etcetera, etcetera, and I think you really need to think if you want to be properly in the protection market, you really need to think about the consequences of why we do what we do. And that’s why, you know, the claims stories, whether it’s 7Families or all the other stories that are told, are really important to think about. And I think what 7Families did is that actually it disturbed a lot of advisors who came back to the Income Protection Taskforce and said, “Ah. Now I get it,” Okay.
Roy: And that was probably the most used phrase [laughs] and there was a little lightbulb that went off, or whatever it was, it didn’t matter. And actually, the results are there to be seen. So I’m not saying that income protection salesmen sold out because of 7Families I hasten to add but, you know, we basically doubled the market in a five-year period, mainly because people were talking about the subject.
Roy: And I think that’s really, really important as well. Even if someone doesn’t take out income protection or critical illness, whatever it is, okay? To your point, as long as you’ve advised on it and you’ve had that chat on it, okay, and documented it, then you’ve done all you can do, okay? And the other thing that I guess many of us would do is that if budgetary constraints are very, very tight, it might be that you set up something now, or a multi plan with smaller amounts and you go back and top up at a later stage.
Roy: Okay? Because some cover’s better than no cover and I think that’s sometimes, you know, what gets forgotten and I guess it’s probably, I can’t believe we’ve spoken for half an hour and haven’t mentioned the S-word, but this is probably our first shout out for signposting.
Roy: Because I think if you are in a situation where you’re thinking, “Oh, I’m not sure how to deal with some of those objections or not sure how those disturbance techniques or where I bring this in, you know, in my fact finder from my mortgage broker or wealth manager, or whatever,” I would, you know, come back to signposting and go and marry up with somebody out there, a protection specialist, until such time that you want to do this yourself. And we’ve already got evidence, haven’t we Kathryn, of people that started signposting and after a while have gone, “Right, brilliant, thanks for that, now actually we’re going to start doing it ourselves.” Voilà!
Kathryn: Yes. Yeah. I mean, and signposting, it does really work, you know, we’ve – I think at Cura at last sort of count in a sense, we’ve got over 600 introducing IFA’s to us and it really does work and these are long, ongoing relationships. And it doesn’t have to be every single case, you know, if you can do something yourself, do it yourself, if you just need a specialist every now and then, use a specialist every now and then. If you don’t want to do it, you know, just pass it over to a specialist rather than just leaving it there. But just going back to what you were saying a little bit in terms of like the whole, you know, with something like income protection, if it’s too expensive for somebody we could maybe do something smaller now and then make it bigger. I mean, that’s quite a big thing for me as well, because obviously I’m training people a lot like, we’ve got quite a few people joining Cura, which is good. So, we’ve got six trainee advisors at the moment.
Roy: Cura is the new Northern Powerhouse isn’t it, that I’ve been reading about?
Kathryn: [Laughs] Well, I’ll only keep saying, we can only get so big as I always say, world domination is completely on the cards [laughs].
Roy: Is there going to be a Cura Towers soon?
Kathryn: Yeah, we’ll just have like a border around Yorkshire, just like, “This is Cura’s place.” So as I say, we’ve got all these trainees and one of the things that I am big on as well is the fact – ‘cos a lot of people don’t come into this industry having any knowledge of how this industry works or, you know, sort of like how to apply this stuff and I’m always thinking and sort of saying to them I don’t want them to beat themselves up, you know, if they’re recommending something and somebody turns round and says, “I just can’t afford it,” then, you know, it’s a case of we don’t beat each other up because I see these posts on social media and all this stuff and people say, “If you’ve done a good recommendation and all this stuff, your clients going to take it and it doesn’t matter that we know about the price, if it’s good, they’ll understand.”
And it’s a case of well, to a certain extent, yes – but at the same point there are times where no matter what you can do – if you do the best advice in the world, the all-singing, all-dancing versions of everything, some people might end up picking and choosing or you may have – they may turn round and say to you, “I can’t afford all that,” and, you know, “Is there a way to make it cheaper?” And you may need to do what you’ve said, which is with an IP policy – you might need to, I don’t know – extend a deferred period a bit, you might need to make it a shorter claim period for a little while. The brilliant thing about income protection is the amount that you can do to tweak it, to make it suited to that person. None of the other policies allow you to do that. And I think it’s just really important to also, because I kind of think it’s a little bit dangerous to say, “Well, a good recommendation, people are going to take no matter what,” because then I kind of feel that puts advisors in the mindset of, “Well, kind of, I’m all knowing and this is perfect and people should have it,” because ultimately there are people who simply cannot afford these insurance policies.
Roy: Yes and this is where textbook advice and real advice are often completely different things.
Roy: The other example I’d give there by the way – and I’ve done this loads of times, is just take the sum assured down.
Roy: We don’t always have to cover 60, 65% or whatever the maximum is on an individual. And it might be you say, “Look, I’ll tell you what we’ll do at the moment – let’s just cover your mortgage payments, okay?”
Roy: “And let’s see how that goes for six months.” And I think this comes back to something that our industry isn’t brilliant at, but should be getting better at, which is reviewing, okay?
Roy: So all of my pension clients that I see and my ISA clients that I see, you know, automatically get a review. We’re made to do that, that’s a regulatory requirement. We’re not good as an industry at reviewing and we’re shooting ourselves in the foot there, because if we did review, actually, I suspect most people’s premiums over a period of time would go up, okay? Because people’s circumstances – generally – generally head in a better direction, okay?
Roy: And as they earn more, get promotions or whatever the case may be, they’ve probably got a few more shekels to put into the plan and I think that it’s really important that you note that properly, but always remember, “Right, I’m going to come back and talk to you in six months or 12 months.” Now you’re going to have to diarise this, okay?
Roy: The client – it’s not a priority to them, so you’ve got to be really good at diarising it yourself. But I can’t remember a single client that’s ever had a problem with me going back to them after a year and saying, “Let’s do a review and let’s have another look at this, okay?”
Roy: I also think that sometimes, this works because something’s happened in their life, in between them seeing you. So unfortunately, they’ve heard about someone being long-term ill, or they’ve read about, you know, a celebrity having cancer or, you know, the amount of people that say to me, “Oh, strokes, that’s what Andrew Marr had.” Now, there are millions of people in the UK that have strokes, why do we talk about this guy called Andrew Marr? Well, because he’s in the public consciousness.
Roy: And actually, he talked openly about it. So, it might be that you’ve done a piece of crit ill or a piece of IP, but they’re relatively low. Then they start hearing a real-life situation. “Ah right, that’s what that guy was going on about,” and then when you come back, they’ve got that receptive audience and I think there are plenty of us that started off on relatively small premiums with clients that have increased over the period. And I think you have to be also just – you have to do the right thing here, in terms of keeping an eye on inflation as well. And isn’t it funny, that inflation’s been mentioned so much in the news over the last three weeks, okay? Nobody has put inflation and protection in the same sentence until this podcast.
Kathryn: [Laughs] The first person was Roy McLoughlin.
Roy: And what I’m talking about here is keeping in touch with your sum assureds. The amount of people I’ve met over the years, I’ve said, “Oh, have you got life cover, have you got crit ill, have you got IP?’ And they say, “Oh yeah, I’ve got it, I’ve got it.” “When was it last reviewed?” “Ah, when I took the thing out – sometimes with a Bank.” “Well how much are you insured for?” “Oh, I don’t know.” And then, you know, the classic example, you go and help them find out what they’re insured for and they’re insured for £25,000 because they took this thing out 15 years ago. And you talk to them about the effects of inflation on their lives. Now of course psychologically, to that client they’ve got a CIC policy or they’ve got an IP policy or life policy, okay? And actually, sometimes the sum assured doesn’t really matter to them at all – it’s the fact that they’ve got one, okay? I think it’s incumbent on us as a profession to talk to people about the effects of inflation. Because if inflation is broadly two, 2.3, 2.5-3% per year, is your protection requirement keeping up with inflation? Well, it jolly well should be.
Roy: Because probably, your purchasing power, the same thing has happened and I think that this is something, I mean it’s exactly the same principle as talking to someone about their pensions by the way. And I think this is something where we – it is incumbent on us to keep in touch with clients a bit better than maybe we do.
Kathryn: I think that’s– yeah, I think you’re completely right with that and I think as well, for me particularly with our client base being people who have a lot of health conditions a lot of the time, it’s something that we – it’s quite strange actually in some ways at Cura because, you know, with a lot of people with health conditions, the circumstances might have changed, but obviously, the terms that they can possibly get now, you know, as they’ve got further down the line possibly, progressive conditions get harder and harder. But then, there’s other times that the underwriting can change in such a positive way. And something that I would say to people is that if you have somebody in your client bank who has a health condition, maybe it was somebody who was a bit trickier to get cover for, it is always worth having a regular kind of, you know, if you suddenly speak to an insurer, it’s like someone else with a condition or something, you suddenly like really good terms and think, “Hang on a minute, that was so and so, I’d better have a look as I might be able to get them a better deal now.”
Roy: This is not the podcast for us to go into the recent article in The Times which has caused, as you know, an avalanche of criticism and comment but think about that story, and I’m sure everyone has now heard about it, and what would have happened if the servicing had been done in a slightly better way? And I think that, yeah, there are some old policies out there and some of them aren’t fit for purpose anymore but if they’re just forgotten about and not looked at and not serviced, this isn’t just protection, this is investments and ISAs and pensions, I hasten to add then – well of course these stories are going to get out and get misreported in the way that they are.
So I think that, you know, we’ve got to remember that we have got a responsibility and it’s also in our interests. I mean, many of us listening to this podcast will have clients that we’ve had for years, okay, and they’re the best sort of clients, because they refer you to other clients. If they can’t even remember your name, let alone what policy they’ve got, they’re not going to refer you round, okay. Whereas I’m sure people are nodding at this part going, “Oh yeah, my best 20 clients are people that refer to me all the time,” well that’s because they know who you are and you’re probably talking to them quite a lot. And I suspect those are the people that would have not as accurate as we would hope, but quite a good idea what they’re insured for.
So again, this just comes full circle to you know, we must stay in touch with people. And I also think the other – and I’ve heard clients talk about this out loud – don’t underestimate, if you teach a client how to actually deal with their own objections they’ll use what you’ve said with their people in their – with their peers, friends, family, peer group, etc., etc. Because I’ve heard it, alright? So they might be at work going, “Did you know that we only get three months’ sick pay and then it’s at the employers discretion?” Well guess what, the four or five people sitting round him are going to “What? What? Who told you that?” “Oh, this person called Kathryn Knowles.” “Well, I’d like to have a chat with her.” It leads to referrals, guys.
Roy: And I promise you that. So it’s in your interests to, for, yeah, utopia would be Kathryn, every client of yours could rattle out how much life cover they got, how much IP and how much CIC, but here’s the bad news, Kathryn, you’re not that good, okay? So –
Kathryn: I know. The ultimate aim is for them to be able to reel off all the conditions that’s listed in our CIC contracts, isn’t it probably? I mean, that’s – [laughs]
Roy: Exactly. So I think we do something that’s not everyday chat, okay and we make the industry sound much more interesting than it is sometimes. You’ve got to realise that a lot of what we do is quite boring for people but they should still know vaguely what they’ve got and they should too remember who you are and that’s the other part about keeping in touch with people.
Kathryn: Absolutely. It’s the kind of thing like we’re developing a specific – obviously we do keep in touch with clients, but we’re developing a specific department now in the company for making sure keeping in touch with people, doing reviews of the policies, just so that we know it’s all kind of being managed in a certain area. Just because, as you say, it is so important. People have children, people get divorced, you know, and it’s trying to make sure, ‘cos I mean, I don’t know if you’ve ever had it, I imagine you will have had it but, you know, the amount of times that we’ve had people where they’ve got divorced and all of a sudden, it’s a case of someone ringing up and saying, “I want to cancel a policy, because I don’t want him getting anything from this.” And you’re kind of, “Well, let’s just try and, you know, make sure that we’re going to do this in the right way and, you know, let’s not just run straight into cancelling all the policies because, you know, there’s still children that you may be wanting to look after, it’s not just about the ex-partner.” And, you know, it’s – there’s lots where you need to step in and help people see the bigger picture.
Roy: And changing jobs, you know.
Roy: The average person in the UK changes jobs once every four years. So let’s say they had a comprehensive income protection or crit ill at their employer. If they’ve moved to a new employer, again, I don’t want to shock our viewers but I promise you, then first thing people don’t ask is, “What’s the income protection here?” So it might be they had it, you’ve fact finded that, you’ve documented that, which is why you haven’t given them income protection, they’ve moved somewhere else and the new employer doesn’t have it. If you don’t keep in touch with your customer, how are you going to know that? So I think, you know, yeah, divorce is obviously the negative one, but the positive one is people moving jobs or getting married or all sorts of different things and circumstances change. Your protection needs to change.
Roy: You know, that’s just, that’s pretty sacrosanct, I would say.
Kathryn: Well, I’m going to put you a bit on the spot Roy, if that’s okay and I’m going to ask you some questions then, about –
Roy: Shoot away.
Kathryn: If I was a brand-new advisor and I was coming to you and you were training me, I’d be saying, right, “What would be your response to somebody who’s objecting to getting life insurance?”
Roy: Um, okay. So, first of all, I would look at what happens if they die if they haven’t got it. So, if they’ve got any loans and that can be mortgages or loans or responsibilities. It could be they’re, you know, having children, and so on and so forth and you have to paint a scenario, okay. In a positive way, okay and in a responsible way, but you need to talk to them about, “Let’s paint the scenario if you’re not around and what’s left to whom.” And you know, if it’s a mortgage, you know, I think the easiest line to throw out there is, “Okay, who does the house go to if you die?” They’ll soon tell you who that person is and just say, “What would you prefer? Would you rather that person had the mortgage company knocking on her door going, ‘Can we have our monthly payments please, or would you rather have the mortgage paid off?” So that’s only one example but.
Roy: But generally, you know, that’s the sort of – there’s my quick-fire answer to that one.
Kathryn: Well you know there’s going to be a theme to this now. So what would be your response to somebody who was objecting to critical illness cover?
Roy: Um, I would just look at the fact and the propensity for it to happen, you know, those stats of one in three people before 65, etc., etc., etc. And I just think your exposure to financial hardship if you need time off. And I always say, it’s not as much about the critical illness cover, it’s breathing space, okay? I think there’s one or two insurers that call – who have used the word breathing space.
Kathryn: Yeah [laughs].
Roy: But it is breathing space.
Kathryn: This isn’t product related.
Roy: No, it gives you– well I’m not going to mention their name but you know who they are. But it gives you the ability to come back to work when you’re ready, okay? And quite often – and let’s take heart attacks as an example, quite often, I know clients where their doctor has said to them, “Look, you know, one of the reasons you’ve had this is stress at work, or something to do with work You need to go and sit on a beach for six months and just move away from the whole work scenario.” And they’re going, “No, but I have to get back because, you know, I need to pay this and I need to pay that, etc., etc.’” If you’ve got a critical illness policy, you’ve created that breathing space so you go back when you’re ready, not when you’re forced to go back.
Kathryn: Absolutely. And I know we’ve probably talked about this and this, but just as a bit of a summary, what would be your – sort of like your key things that you would do to somebody who’s objecting about income protection?
Roy: I would talk to them first and foremost about that is the thing that’s most likely to happen, okay? And guys, you’ve got to have the facts and figures here, you’ve got to be able to roll out how many people were off long-term ill, you know, particularly before 65th birthdays. I would also talk to them about, you know, the one I always throw out is something we always use, I’d say, “What’s the two biggest causes of absenteeism in the UK?” Right, it’s a nice little quiz for people. Not everyone gets this right by the way, but when they realise that it is musculoskeletal and mental health issues and then you point out that income protection is the only solution for those, it does make you think again. But I think going back, you really pushed the point on what are you getting back from your employer? Okay? Go that little bit extra, do that little bit extra for the client, they’ll appreciate it and then effectively, they answer their own question.
Roy: And then all of the minor things that we’ve already gone through on too much, I mean, the one that always makes me smile is, “My parents would look after me,” okay, alright? And the easy riposte to that is that with very exceptions, do you really want your parents to be supporting you financially when they probably supported you for the first 20 or 25 years of your life? And also, is it fair on them? Okay? And I think that’s an easy line to throw away, you know, my parents would look after me. But, you know, I think you need to, you know, think through in a positive way what that objection actually means.
Kathryn: Absolutely. I think that’s a really good example that one, because I know somebody who was ill and the parents needed to look after them. The Mum, who wasn’t well and really did need to retire, couldn’t retire, because she was having to carry on extending her retirement, so that she could continue to support the child, which was very difficult to hear, actually.
Kathryn: You know, because you’ve done your dues, you need to be able to retire, you need to be able to just enjoy life and –
Kathryn: And I think, as you say, I think the majority of people probably want their parents to be in that kind of a space where they can just sort of like, “You just relax now.”
Roy: I guess the other one and I think we’ve mentioned it already, but another quick one, is “The State will look after me.” And I think, as an Advisor, you don’t know how Universal Credit works. I’m not saying you know every vagary, but you need a rough idea, okay? You’re doing your client a disservice and I think in that situation you need to hit them with the facts. And when someone says, “I will be looked after by the State,” you need to say, “Okay, let’s see what that sentence means,” and actually drill down and you won’t be surprised to hear that when people actually realise what they get back from the State and I mean this apolitically, I hasten to add, but when they actually realise what they get back from the State, they tend to look at you and say, “That’s not enough.” Okay?
Roy: And that’s not enough is a very interesting threat, because what does it mean when it comes to income protection? You’ve disturbed the need; they want a solution.
Kathryn: Absolutely. I think one of the things I do sometimes is I – I think I was looking at it the other day, I was doing something and – or advising [laughs] and I had a look and it was something like statutory sick pay, I don’t know the exact amount, it was about £96 a week? And I think, if you put that in front of people and just go, “Okay,” you know, that’s not going to cover most people’s mortgages.
Roy: Yeah, SSP and Universal Credit, you just need to know about and the one thing you need to be very careful about is savings, okay? And I would advise any of our listeners to look up the rules about how much you’re able to claim from the State if you’ve got certain levels of savings, okay? You might be quite shocked what that ends up in. But again, this is incumbent on us, we’re not just doing this job, just getting out of bed and just doing it, we’ve got to do some work. We’ve got to do some research, so all of those answers by the way are out there. We just need to go and find them. Kathryn and I are not going to tell you every single answer.
Kathryn: No, no. We’re giving little titbits, absolutely. Well that probably leads on quite nicely to me unashamedly chatting a little bit about my new training course. And that kind of like fits in nicely with it, so for anybody who hasn’t heard, I am doing a new training course, which is Protection Insurance in Practice and it is 13 hours of credited CPD, that’s done over 12 weeks. Or, this week, I’m having my first run through, which I’m excited and nervous about, it’s going to be –
Kathryn: I know! It’s a three-day intense course and I have warned everybody beforehand who signed up, I’m just like, “Just be prepared, this is gong to be intense, you know, this isn’t, this is not going to be easy going.” So, as this session is out, I’ll be on day two, which is the three sessions on underwriting risks, so it’s all about talking about the most common health conditions you’re going to be coming across and what you need to do to prepare for them as a protection advisor. But it’s going over things like your compliance needs, your – how to build a recommendation, how to understand clients’ personalities, how to improve your soft skills. It’s then going to effective fact finding, gaining confirmation, client retention, vulnerable clients, claims handling. The whole kind of shebang really, so I kind of trying to say, it’s kind of taking our – sort of like our official kind of learning that we get in our industry and actually bringing it to life.
And bringing it with examples and saying, “Well, if you’re going to be doing this, then you need to do this bit with it and if you’re going to say this, then protect yourself by also doing this extra bit as well.” Because it’s no secret that I come from a compliance background, so pretty much everything I do when I approach the clients’ advice process is, where’s the potential complaint? It’s like, I want to do a good job, but it’s also where are the complaints coming from, I need to make sure that we’re covering everything, because, by doing that, you’re actually, I think, in the way that I’ve done it with the training, I actually think you become a better advisor, because you know all the things that you can’t miss. Because if you do, it’s going to trigger a compliance flag. And so straight away you’re kind of automatically embedding it from the start.
“I must go over all these areas first and I need to make sure that I’ve not recommended waiver of premium, why haven’t I recommended waiver of –” You know, all these little titbits and things, like that, that need to come out and so. So excited, hopefully next time on the podcast, I will be saying that it’s been a very positive experience and I’ll hopefully have lovely feedback to share with people. And yeah. Hopefully, fingers crossed, it’s going to go okay.
Roy: Yeah, very excited for you.
Kathryn: Thank you. It’s um, yeah, intense, nervous, but exciting, so. That’s about it. I’m just going to, I’m kind of in panic mode a little bit, I’m like, right, I’ve got two days, I’ve got this, I’ve got that, there’s this many award entries, I’m judging some awards, I’m doing – still got to advise my clients somewhere. It’s just [laughs], but as with everybody, I think there’s lots of things that we’re kind of intensely preparing for the summer holidays as well, trying to get everything – everything in rows as quickly as we can, especially when the summer school you think you’re going to send your children on has suddenly been cancelled, and you’re thinking, “Ah, okay.” [laughs]. Hopefully not many people are in my boat with that. But is there anything else that you want to leave everybody with, Roy, at the end?
Roy: I think my message to people would be signpost if you’re not going to do it. I think signposting is a journey whereby you can start signposting and then realise that you should be doing this yourself. But my biggest plea to people, well two pleas, firstly, please stop using ‘N/A’ in fact finds, you know who you are, but secondly, there is some education that’s needed and I think that it’s that sort of duty of care I guess we’ve mentioned is, if you’re not sure about a subject, go and find out, because there’s some wonderful people out there, there’s some wonderful insurers. Get up and sign up with Kathryn’s course, etc., etc.
And, you know, protection is a great business to be involved in. And we do positive things for people. And I always say, the proof is absolutely in the pudding. When you have a claim and the insurance company quite rightly pays out, just remember that feeling you have with that person’s family, or kins, and that makes you feel good about doing this job and what we do is so, so important and you should take pride in it, but obviously in order to advise on it you’ve got to have the right skill set. So I would just say, take objection handling in a positive way because I think that Kathryn and I both agree that there’s pretty much nobody out there that doesn’t need some sort of protection.
Kathryn: Yeah. I do agree with that one. Well thank you very, very much for joining me for the first, the first outing of Season 4.
Kathryn: It’s been lovely to have you back. So, in a couple of weeks’ time, I’m going to be back with Matt Rann and we are going to be discussing accessing insurance when you are transgender. So, we’ve just had obviously Pride Month and it feels like it’s a really good time to be discussing this and hopefully to dispel some myths about what people might face when they are applying for insurance in terms of service and also in terms of the actual terms that you might get with insurance.
So, if anybody would like a reminder of the next episode, please drop us a message on social media or visit the website practical-protection.co.uk. And don’t forget that you can have a CPD-accredited certificate, thanks to our sponsors, Octo Members. It’s been lovely speaking to you Roy, thank you.
Roy: See you soon, bye bye.