Hi everyone, we are back with a bit of a different podcast episode this week. I’m joined by Roy McLoughlin and Lee Robertson and we are sharing our thoughts on how protection insurance is working right now. Regulators, government, financial advisers, protection education, we are not holding back on what we think.
It’s incredibly interesting to hear from Lee that when he joined the finance sector over 30 years ago, the starting point of advice was protection insurance. That was what all the training focused on with the mindset that the very least you would do for someone is protection cover. Yet, here we are today with many of us trying to encourage people to write more protection. Why is that? What has changed to make protection seem like an add on rather than the core basis of financial planning?
The key takeaways:
- Collaboration between advisers from all specialisms is developing the best consumer outcomes.
- There are clear barriers to improving the perception of protection insurance even within the advice world, that must be addressed.
- We talk about places where you can go to get support to improve your protection advice, through informal networks and training.
Our focus this episode was to give you all an idea of something that is happening in the finance space that is exciting us, something that we would like to see changed and why, and then also something that we wish more people knew about the insurance world.
Next time Matt will be back with me and we will be talking about arranging life insurance, critical illness and income protection for people that have sarcoidosis.
Remember, if you are listening to this as part of your work, you can claim a CPD certificate on our website, thanks to our sponsors Octo Members.
If you want to know more about how to arrange protection insurance, take a look at my 13 hour CPD Protection Insurance in Practice course here and 1 hour CPD Protection Competency Exam here.
Kathryn (00:05):
Hi everyone. We’re back with the Practical Protection Podcast. We’re on season seven, episode 11, and today I have Lee Robertson and Roy McLaughlin with me. Hi.
Lee (00:15):
Hi Kathryn.
Kathryn (00:19):
Today we are going to be talking, we’re going to give quite a bit of commentary today, a bit different to usual. We’re going to be talking about things that are happening in the wealth and insurance space that’s exciting us right now. The things that we would like to see maybe have a bit of a change in why and something that we wish that people knew about the insurance world. This is the Practical Protection Podcast.
(00:51):
So I think this is going to be a really exciting conversation because it’s definitely giving our opinions out there and possibly a bit controversial at times. Maybe I don’t think it’ll be too controversial, but you never know. But what’s great is obviously we’ve got, all of us here are huge advocates of protection, obviously Lee Roy, you come from the wealth background as well and are able to bring in that that background is sort of like how it all, it does naturally merge together because I think there’s been quite a lot of years and quite a long time now where wealth and protection or protection in anything has just been removed and a bit divided and seen as possibly the little annoying cousin that doesn’t shut up and stop running around at the wedding or something and everyone tries to ignore. So let’s get off with you to the site, the start then and let’s talk about right, what is it that you are both finding really exciting right now?
Lee (01:42):
Well, I’ll jump in and this might sound slightly I guess because of Al, but the thing that I really noticed and I just wrote about it recently as well is as an industry, as a profession, we used to rely on publishers and life companies in the main to put on other events. And I think the thing that I’ve really noticed over the last few years as how advisors of any HU are sort of banding together, learning together cohort learning conferences by advisors for advisors and I think what I really love is the way that we’re kind of setting our own agenda now. And I looked at some of the social media the other day from a couple of conferences and I looked at our event last year and the feedback’s just fantastic. I think that’s the wonderful thing because only the advisor really knows what’s going on within their practice or their practices more generally. So it sort of makes sense that if we are running our own events for each other by each other, this is just an incredibly interesting development I think and I think Longly that continued.
Kathryn (02:48):
Absolutely. I was going to say, the thing that really stands out for me with that, sorry Lee, get myself confused there, is that it takes me back to when I was at uni and when I did my thesis and my thesis was all about bottom up change and basically saying if you’re wanting to really make true change and develop and grow and things like that is one is the informal networking is huge, massively important. But that thing as well that you need to get people who are actually facing things, who are doing things day to day together because they’re the ones that really know how things are working. You can get all these things from the top, let’s say, well it should be this and it should be that. But then as you get down those different layers towards the people who are actually providing the advice, it just works out so differently.
Lee (03:35):
Yeah, and I think, sorry. Right. I think that’s absolutely true and for me, the best part of any conference was always the networking was to mix and mingle with your peers and share stories and all the stuff that goes with that. So yeah, I completely agree.
Roy (03:51):
Yeah, I absolutely sense that the collaboration of our industry has sort gone up a notch and it needed to because you’re absolutely spot on. I love the wedding analogy, Kathryn. We were the, I wouldn’t say the annoying niece, but no, we were in many ways the poor relation from a protection point of view and there was a little bit of snobbery, I think you’d agree, Lee from some parts of the wealth community about oh you do protection and I’ve had that over the years, but I think we’re moving away from that and I think there are lots of powerful reasons for that. But integral to that is just the fact that none of us will have clients that don’t need protection and I don’t care how big your portfolio is or what sort of employee benefits you’re doing or how big your mortgage is, there’s a protection underline there somewhere. And I think that now we’ve reached a situation where our wealth cousins, our mortgage cousins, our group cousins that actually get that and Lee’s absolutely right, they will seek you out of conferences and you can hear conversations that you probably haven’t heard for a while as opposed to, oh you just do protection.
Lee (04:59):
I think that, yeah, that’s really interesting. I’m a sort of vintage now I guess, but when I came into the industries it was back then you started with protection. Now that may be because a lot of industry was dominated by life companies and there used to be far more than there are now. You think of your Scot amicable and all of these great names that have disappeared over time are being consumed by others or sold off to be closed books even. But we sort of started with protection as the basic building block of any plan even we didn’t even really call it a plan back then of any relationship with a client started with protection, the transference of risk from self and family in the case of catastrophe, whatever that might be for nominal sum generally pretty reasonable over to an insurer was fundamentally where we started in the advice process long before we got to investments or pensions or that kind of stuff. And I guess over the years as the functionality improved within wealth and we got platforms and people got drift away from life codes as the investment vehicle et cetera, maybe that’s where the rock started set in, if rocks the right word, we got slightly too posh to protect. I think that’s a phrase that picked up from you guys. I’m sorry I it
Roy (06:22):
No, it’s fascinating. I started off direct sales and you’ll meet people, I was with friends t, but when you meet people who work for our Dunbar and my group and Abbey Life and all those sort of companies that we know that yeah, absolutely. The training was very much protection first and then the other things came second as a demise of the direct Salesforce pretty much disappeared. I think that that was the problem, that there was no one out there actually talking about protection and I’ve never quite got this. There was a reluctance of some insurers to offer training on protection because what was put to me sometimes was it really isn’t our role and I think we’ve pushed back Kathryn, haven’t we? We’ve said as an industry, please, please, please insurance companies come out particularly to some of the smaller practices where they don’t get that ability to go on these big training courses. Please come out and use broker consultants or whatever you want to do in order to help educate people about how protection products are and how they work. Would you agree Kathryn?
Kathryn (07:19):
Yeah, absolutely. And I was going to say, this just puts me very, very nicely to talk about education and things like that. Why to be completely self-serving is about what excites me, which is this podcast which obviously not wanting to toot my own horn or our horns too much, but we have over 9,000 unique listeners now and over 22,000 downloads of this podcast. That’s not a small amount. And considering how niche we are as well, we’re not talking full IFA planning or anything like that or general public just coming in and listening. This is very much going to be, the majority of people are going to be advisors and there’s over, I noticed in the systems that I can look at, there’s over 2,300 hours of CPD that have been issued for what we’re doing. So that’s showing how many people are really engaging with this.
(08:10):
And I think I find that like we’re saying, it fits in with everyone was saying that about the conferences by advisors. For advisors, this is exactly where this has come from. This is advisors and with Max joins us underwriter as well, helping each other. We’re not getting funding from anybody to do anything whatsoever. It’s just a case of us trying to share knowledge, give that information out there. And I think that whole collaboration, and I’m going to use your favorite word Roy as well, signposting and getting us all together and just realizing that we are a community. I think we’re trying to, I think for quite a long time there’s probably been this thing of these are my clients, I’m going to keep them the mind I’m holding onto them, no one’s allowed to speak to them. It’s more of a case of us all having a bit of humility and going, actually I’m not the best for this thing and I know you’ve said it before, while you’ve got an accountant, you’ve got a solicitor. You would never dream of either of those trying to step on each other’s toes. It’s exactly the same with us guys. It’s a case of actually my specialist, I can do that. Some people might be because I can do protection, but you know what, I’m not doing it day in, day out. It’s not my specialty. I’m going to get somebody who is. And really over the last, I would say probably the last five years or so, that collaboration side of things really just seems to have absolutely flown.
Roy (09:30):
It’s very point came out literally last night and there was an obvious joke here, but I was in a room with a solicitor, an accountant and a bank. So I’ll let Lisa that joke in a minute but
Lee (09:39):
Actually say it sounds like the start of the group,
Roy (09:43):
This very point came up and just, I think it’s important to listen to those, I call ’em our sister professions. I it’s important to listen to how they transact business. And the point was made exactly what you just said there that with all of those professionals I’ve just mentioned, they bring different people to the table according to the question that a particular client has. The client doesn’t care if you’re bringing two or three of their colleagues to the table. We need to do that, that more that is signposting and we’ve got to get away from this. You’re absolutely right. This is my client. It is like the homework at school, isn’t it? Putting your arm around it. Well I was always trying to nick everyone else’s homework before you say it, but we’ve got to get our heads around clients. Don’t mind if you actually bring a few people along to be part of the solution. They might want you to be a conduit, which is fair enough, I get that. But actually I think there’s sort of, I can’t allow anyone else into that room we need to move away from because I think that problem’s in our head as much as anyone else’s.
Lee (10:38):
Look, I would agree with that Roy. There’s all sorts of phrases here. There’s no trusted advisor, but if the advisor is the main relationship order with the client, a client genuinely will be looking for great advice across a number of things. And if that particular advisor isn’t skilled in a particular area, they should have no shame at all in saying, listen, that’s not what I do to you today, but I know a great connection who absolutely does this. I will make sure his standards or her standards are at least as good as mine in that particular field. I will help you through my black book or however you describe it, my trusted network of professional connections, however you describe it. I will introduce you to X and I think the very best advisors that I always knew did that constantly and it became a two-way conduit because there were things that parts of that trusted network couldn’t do and they’d refer back to you. So it becomes a very circular, helpful thing for the private client to actually access. So I absolutely take your point, Roy, it should be no shame at all and no hesitation at all in advisors of whichever queue referring things to each other for the bits that they cannot do.
Roy (11:50):
There’s also the office line of jack of all trades, master of none. And I think the fact of the matter is, is that if you tried to claim knowledge of pensions, mortgages, protection, complicated trust work, the client after a while is going to go, well, hang on a minute. How many courses do you go on? How many exams have you got? You seem to be an expert on ahead of a lot of things, which we know in life a little alarm bell goes. So
Kathryn (12:15):
Absolutely. So what do we think we would like to see changed and why would we like to see it changed?
Lee (12:22):
Well, where do you start here? I mean Roy and I have talked about this many times. I think for me the perception for me, a place to start with the perception of government and the regulators as to what the role of the financial advisor or mortgage advisor or whatever that role actually is. I think there is, they sadly have to deal with the stuff that goes wrong. So I kind of get why they get sometimes a jaded view because it does go wrong. But the absolute proportion of advisors come to work to do the very best they can for the client each and every single day. And a lot of what government and regulator never sees is what I like to call the pastoral care that goes on with clients when they’re about to lose a loved one or where they’ve just lost a loved one or where they’ve just had the most traumatic news or they’ve just lost a job or whatever those situations that every advisor encounters through their career.
(13:20):
And we all know we stood at the grave size and what the wedding, whatever those things are, but I really wish the regulator and the government would give a little bit more credit as opposed to thinking of this. And I cite this from an MP and maybe this in my head because I was at the Times event at the House of Parliament yesterday named dropped name, but an MP said to me a while back, well, you advise us really, you’re just tax planners for the wealthy. And I was so enraged by him, he and I ended up having quite an argument because I thought it was such a dismissive thing for someone that had treasury responsibility to say it was just ludicrous. And I thought you should come and spend time within practice to see what actually goes on. Anyway, I’ve got off my soapbox, that sort of stuff.
Kathryn (14:04):
I’m sure there’s quite a few of us that would’ve possibly turned around to the MP and said, oh, well I just thought you did this. Maybe it would’ve been a two-way conversation with that
Roy (14:15):
Actually
Lee (14:15):
Didn’t do this. Yes,
Roy (14:17):
I think that’s such an important point. I mean we’ve recently introduced effectively a death pack for clients so that they can give us all the details of not anywhere all their policies are, but their wills and their kids and all that sort of stuff. And just putting all of that in a pack for people because when bad things happen, people turn to us. I mean our viewers, our listeners will be familiar with the Simon Thomas story. He came out and openly talked about the role of advisor post claim. I mean there’s so many things that I think people just don’t realize that we do and also that confident as well. And I think one of the things that people underestimate is that the likes of Lee and I will often be the first person that a lot of people talk to when there are major changes in their lives.
(15:03):
Sometimes happy changes, sometimes good things that are happening. I’ve had a pay increase or I’ve moved to a really good job, I would just bought a big house. But there’s a negative things as well. Unfortunately I’m going to have to get divorced. There’s been a definite family, there’s been some mental illness in the family, et cetera, et cetera. We are often one of the first persons that people turn to a, they know they can trust us. We’re not going to go off and tell the people about it. But actually we are part of what often is the solution there. Now a lot of that work isn’t us doing complicated tax planning for people or lots of investments and planning. It’s just us being good people and helping people out. And I wish there was a way that yes, not only mps, but you’re absolutely right.
(15:44):
I think the regulator also just doesn’t quite get what we’re doing there. I mean it’s hard because clearly this is confidential stuff and we would never go and tell those stories in public. But actually as an industry, maybe we should need to represent what a day in the life of an advisor is and all of the other things that you end up doing for customers. Because I think firstly regulators and politicians would be shocked. But actually I think there’s a lot of people out there who are potential clients who would be quite shocked to those other strings to our bows.
Lee (16:18):
Yeah, listen, I agree, Roy, without it becoming self-serving, we can all cite stories as you say that very often the passport is called and if you’ll prevent me, I’ll tell a story about a client of mine without naming names obviously. And I got a phone call from her and she said her office was yards away from mine to be fair. And she said, did we meet? It’s really quite urgent and fun enough. I said, yeah, actually I’m clear. She goes, well, we’ll meet at this particular place. And we met and she was a lovely client anyway, very outgoing, very bubbly. And we met and I could tell something was wrong and she sat and said to me, she said, you’re the first person I’ve told outside the family or knew outside the family or the medical profession, but my husband has an inoperable brain tumor.
(17:08):
And so it was a difficult meeting for all the reasons I’ve met, obviously her husband. And we’ve done quite a lot of work over quite a number of years, but I, I’ve reflected on this many times since. And I think what an absolute privilege, despite the traumatic circumstances to be the first port of call and it wasn’t about the money. That’s not what she wants to talk about. She just wanted to talk about the situation where it was going and give me a heads up that we will have to talk about money, but I just can’t deal with that now. But I think that’s the role that good advisors sometimes find themselves in as if, I’ll go back to that word pastoral. And I think it is a privilege and I think people that end up in advice, yes, it’s a commercial entity and yes, you’ve got to keep the money going to pay lights and pay your staff and your bills and all that kind of stuff. But I think genuinely most advisors end up in advice because they want to help people. And I think that’s the privilege that we have in our role serving our clients. And I use the word serving very, very purposely.
Roy (18:14):
It’s quite interesting, and we have mentioned this before Kathryn, but I think we should revisit this, the use of cashflow models. So hopefully Lee would agree that the majority of wealth managers in this country now probably use some form of cashflow modeling. And interestingly what you’ll hear is something called the Black Swan event and to a lot of wealth managers, I think historically the Black Swan event was a stock market crash correctly. So you would model a stock market crash of two or three years happening in the future and what that would do to your investments going forward. And actually what I think quite a few of us that straddle those communities protection and welfare have been able to do is to say, okay, there’s another type of black swan event and that is someone getting seriously ill or dying or being off work. And actually it’s really important, and actually all the Castro models allowed you to do it, as I’m sure agreed, but actually people hadn’t quite realized how to put that into the cashflow model.
(19:05):
So yes, it could be a stock market crash, but what happens if you are off for one year, an income stop for one year and your company that you work for don’t have a group income protection policy, 92% of companies, where would that money come from? And that would tend to come from your savings and your hard earned investments. And I think it’s really important that we disturb but then in a positive way engage with the wealth community and say, let’s talk about other things that happen and let’s build those into those models because the functionality is often there. But I don’t think some of the wealth community using that functionality correctly, is that fairly?
Lee (19:41):
Yeah, I think probably you’re probably called such environment in many ways. I might slightly disagree with you Roy, in that I’m not sure that as many financial planning practices are using capital modeling as well as they might. And I think there are definitely a section of service to it because if they were using it properly, there would be far more protection sold as well as investments and pension planning and all that kind of stuff. But you are absolutely right when used well, and I think we always tend to gravitate to people like us, don’t we, birds of a feather and all that kind of stuff. So we got to be slightly careful because I’ve just finished an eight module course with a great group of fantastic financial planners. So you tend to surround yourself by people that are rather like you and because you do cashflow modeling or I did cashflow modeling and they do, you sort of think everyone does.
(20:33):
I’m not sure that’s the case universally. In fact, I was told this story the other day at an event where the aspir show of hands and a huge proportion, I won’t say the percentage didn’t put the hand up for using cashflow modeling. You think, wow, that’s a conference for financial planners and a huge proportion of ’em weren’t doing cashflow modeling. So I think if there was greater reduction of that, we would see more protection sold because the very best financial planners are doing it properly are doing those disaster scenarios, the black swan events, whatever they are, the modeling goes in. So I think there’s a kind of solution there. More cashflow modeling will lead to more protection
Kathryn (21:15):
As somebody who doesn’t do the wealth side of things. And I don’t do cashflow modeling, I understand it, but it’s not something that I would be do with my clients because obviously I’m not a financial planner, I’m an insurance advisor. But I think the key thing for me is that when I speak to people in the wealth space or when I’m chatting to people and they do have a financial advisor especially, let’s take income protection as something. So just like where you were saying there Roy, in terms of taking time out for you, and I think it’s perhaps something I do in my training as well where I showed that event where somebody has become serious, I can’t work anymore and they didn’t have income protection. And something that always stands out to me is I kind of think, but why wouldn’t you in a sense why wouldn’t you do it?
(21:53):
You’re putting in together this beautiful pension and investment plan, this person’s going to be taken care of forever. And also as well, just talking about the commercial side of it, obviously the wealth planners part of their planning and future forward planning is the return that they will get because they will take as far as more certain percentage of certain things each year. So they are getting a return each year. Why would they risk the client their future and their own personal commercial side of things coming to them each year by not doing income protection? I mean I know that there’s probably some people who are so super wealthy that they just wouldn’t, even with something happening maybe not even working in the first place, I dunno, maybe they just don’t need that kind of thing at all. But I can’t see the logic of it.
(22:38):
But from an outside point of view, I don’t understand the logic of why would we risk it because also as well, and it is something to be very aware of. So when we talk about things like this, so if we talk about the financial ombudsman service where people can get told off, we were approached many years ago and when we were approached, the F had come to us and had said, right, we’ve been received a complaint about an advisor firm. And we said, okay, obviously we couldn’t know any details or anything like that and also why you speaking to us kind of thing. And it was a case of right, okay, so we’ve received this complaint and what it is is that this person, this client has died and the financial advisor or advisor, I don’t know which one it was, they didn’t arrange life insurance because this person had a medical condition and they said that they couldn’t be insured.
(23:34):
We’ve not found any research, we’ve not found any evidence that they actually tried. It was more a case of this person’s just really, it just seems that they’ve not done anything. They’ve just not given it a go. They’ve heard the medical condition, that’s too tricky. I’m not bothering this person had died. Obviously there hadn’t been a payout. The family then were getting very upset saying Well why didn’t you do this? And the FS had come to us and said, if you had had this information, assuming that it’s all accurate as to what we can see and all this information we have, would you have been able to get life insurance for this person? And at the time we said yes, we should have been able to, if the people had tried, if they’d done the research or signpost to somebody else, then they would’ve been able to get the insurance.
(24:15):
And what I think is really important here as well is to just bear in mind that that was years ago, that was way before consumer duties come in, all this kind of thing. So all I can think of is that advisors, if you’re not doing this, and this is one of the things again, when I’m training people, I’m always saying to ’em, when you’re doing your compliance, when you’re doing all this kind of thing, I want you to write down what you’ve done, but I also want you to write down what you haven’t done and why. Because what you haven’t done and why is just as important, maybe more important than what you have done. And then it also helps you as an advisor because if you can’t come up with a good reason for why you’ve not done it, then you should be doing it.
Roy (24:53):
That’s spot on. I remember a famous trainer at a friend’s friend’s life when I was being trained who said they should be called reason why not letters. And that always sort of stuck with me, but you know why that’s so important? What you’ve just said about income protection is that people did certainly pre covid have, it won’t happen to me attitude in ahead and therefore it won’t happen to my clients. And if you are really unlucky, you’d become ill. If you’re doubly unlucky, you become ill in a falling markets cycle. And if you think about it, you are then taking money out of hard earned pensions, ices, GSS or whatever you’ve set up in a market that’s going down. Okay, so you’ve got two bits of bad news there and I think we need to, I mean sometimes we use the expression, ensure your pension, ensure your ISR and have something that’s sitting alongside it so that if a long-term illness befalls you actually, you don’t need to touch your investments at all. And I think that’s sort of an education process that just needs to be done and the facts are here. I mean they announced two days ago there were two and a half million people in the UK on income support. So that’s a huge proportion of society who are off with long-term illness. You’ve now got things like long covid thrown in and therefore it won’t happen to my clients is a really, you’re playing Russian roulette. Yeah,
Kathryn (26:11):
Absolutely.
Lee (26:12):
Yeah, generally, I mean picking up on a comment you made earlier, Roy, I think it is extremely rare if ever that a client or clients will have no need for protection even if it’s ends up gifting to divorce or joint life, second death or whatever, inherit that planning at that end. But I think it’s extremely rare. In my whole career I had one client who decided he didn’t want to be invested, but he was outlier, wealthiest client and actually because of the family wealth, I kind of got it. They are so rare I think and even he was open to the discussion. We just decided having done the proper cashflow model, having spoken to about what would happen and spoke about the wider family wealth, et cetera, et cetera, that I could accept reluctantly there was no need. Funnily enough, he did come back later on because we then had to get into the inheritance tax plan.
(27:12):
He came back regular reviews and all that stuff and a future meeting we got back onto protection because of what we had to start doing for the inheritance tax planning. So I think it’s genuinely extremely rare and maybe there’s a historical basis for this with me. I mean I’m from a small town in Scotland, huge believer in protection, which is why we’re so involved with his podcast, but I can’t think, my uncle Alistair was industrial branch for a co-op and he used to meet his friend Archie who was an industrial branch from the refuge and basically they had to hold to small town in stock. I get that. But basically the whole town sewn up in terms of Alistair at the top of the town and Archie at the bottom of the town and they met every Friday meet for a pine in a pint and kind of talk about things.
(27:55):
But every adult in that town and outlying and the farmers were all done by Farmers Mutual, whatever it is. But everybody was insured. And then if a working class town can accept that, I’m genuinely unsure why people have got welfare and more assets and stuff. They’re not inuring the way that we used to me there’s just, there’s a disconnect somewhere. Whether it’s become for all the reasons, as you say too cross protect, it’s become too complex. There are less insurers, there’s less confidence in a certain amount to the advisor market in the whole protection thing it is highly specialist and it’s got more so I would say, but then that’s where the signpost comes back in, refer to someone who knows what they’re doing, work as a collaborative professional with your client.
Kathryn (28:43):
Absolutely. I was going to say my thing to change, obviously I know we’ve just been having a good chat about that, but something that I would really like to see changed, and I know that this won’t be popular with everybody but I’m going to say it anyway, protection qualifications. I find it really bizarre that obviously people who do wealth and pensions and mortgages, all of them have to have certain levels of accreditation to be able to be authorized to advise. I don’t understand. The thing is as well, this to me adds onto that industry perception even internally within advisors as to the fact that protection isn’t as important because in a sense it’s just that thing from the start. Well I don’t even need to have qualifications to do that. All I need is literally somebody to employ me and I can be on the phone in 20 minutes and providing advice which is beyond terrifying because it could be the person they’re speaking to needs complex IHT or gift planning and they can just go ahead and do that.
(29:41):
And that is very, very worrying obviously. And I don’t understand why we don’t need that. Now I can imagine cynically some things. So my cynical side of it would be that it’s not being called for because there’s maybe firms with lots of people who provide advice who don’t have these qualifications and we don’t want to suddenly have to see companies having lots of issues. And I’m sure there’ll be lots of pushback from companies where they don’t require it. But I can’t understand from the regulator side why it isn’t required at all because we’re not doing small things as we say, we’re doing things that are incredibly complex. We literally and as well thinking about it, this isn’t just a regulator, this is also all the state things as well. So if we don’t get income protection rights and things like that are private medical insurance and that means much more pressure on the NHS, much more pressure on state benefits.
(30:37):
So you would think that the regulators and the governments and everybody would want this to actually be happening to make sure that people are being advised in the right way to take the pressure off public funds. And also as well, I have to say, if we’re doing things like protection qualifications, I think there needs to be a broad representation of people involved in it because previous versions of doing an actual protection qualification, so I’m not just talking about individual modules, but an actual qualification of some sort haven’t necessarily worked exactly as we would like it to. Let’s just say that’s probably the safest way to say that. That’s
Roy (31:18):
Very diplomatic. I mean to expand on that, obviously myself and your husband, as you know, Kathryn went to see a certain regulatory exam setting people and talked to ’em about the current, so-called protection exams, which aren’t fit for purpose because they’re asking about products that basically don’t exist anymore and their terminology is generally all about general insurance as you know. So yeah, I totally agree. I mean the impression, I guess that the problem we’ve got is it goes back to original point. We need regulators and government to take us a bit more seriously and that would probably help there. I mean there is a little bit of laissez fans, but probably too much sometimes. But it would be a challenge for some companies though because to a bigger company you would have to take a lot of people out for a particular period of time. I’m not saying don’t do this by the way, but we need to think through it. But where I totally agree is the people setting the exams actually should be the likes of ourselves because it’s people who are dealing with stuff on a daily day basis on subjects that people are actually are being asked about. Absolutely.
Kathryn (32:26):
It’s pointless when you’re sitting a protection exam and all of a sudden you’ve got a question in there about private medical insurance, completely different, will set nothing to do with protection whatsoever. And then there’s also you usually getting the home insurance as well. It’s just like, okay, well, so there’s usually at least one chapter on general insurance. There’s usually a chapter on long-term care planning, which we’re not allowed to advise on anymore anyway. So it’s kind of like we need to figure out something.
Lee (32:51):
It is an interesting thing. Can I ask you a question of you both? I’ve got your big brains here. So we’ve got, is it just from memory, it’s R five is protection, isn’t it? From the,
Kathryn (33:03):
You’ve got the CIIR five and then you’ve got LIBF Certa Pro,
Lee (33:07):
Right. Which
Kathryn (33:08):
Pretty much I’m going to say pretty much the same thing, but the examine itself is different and also with LIBF you do, you are then awarded certificate of protection. So you get SERT Pro after your name.
Lee (33:19):
Okay. So I’ve both, right, okay. I’m sure you have. I’m sure
Kathryn (33:24):
I tested it for my team.
Lee (33:26):
So are those the ones that really need an overhaul then? Is that what we’re saying? They they’re no longer quite fit for props. There’s also the thing is it 15 hours protection ccpd, that’s got to be
Roy (33:38):
Everybody now is required out of their 35 hours if you have an intention to, so we all have to do 35 hours a year. Now if there’s an intention to sell, which doesn’t mean you sell it, there’s an intention to sell protection. 15 of that 35 doesn’t need to be protection. So that’s quite interesting as well, which takes us back to an early point of insurance companies that are listening, please, please come out with more courses. Because what Kathryn and I do find is sometimes people going, I dunno where to go and right, you can do a certain amount of that 15 hours by reading an excellent podcast like Kathryn, et cetera. But people still I think want to go on courses where they were things like overcoming objections. I mean that’s something I get asked about all the time in the training that I’ve gone off and done. How do you overcome objections now that goes back to lead to where you and I were taught, but is there enough insurance companies out there helping with those sort of subjects? I would argue no.
Kathryn (34:37):
Sorry. And just in terms of the actual regulatory body. So with both of those exams that we’ve just mentioned, both of them obviously provide a lot of protection background, but they do have chapters in them that are general insurance or chapters on things that we are not allowed to advise on as protection advisors, which is obviously very, very confusing. I have heard some reasoning behind it before, but I just think we’ll just replace them with more content on something that’s actually much more relevant. What I find quite disappointing is that there used to be some underwriting modules, they’re no longer available so you can’t actually do enhanced underwriting as just, which is very, very essential for protection advisor to understand a lot of things on that. But I think what’s key for me is with LIBF, you get a certificate in protection, which is really positive.
(35:18):
It’s a certificate with the CI hour five, obviously it’s, it’s an important exam, it sits in with all the hours, but I think hour four is possibly pensions. I could be making that up, but whichever one it is, you wouldn’t expect someone to sit a module on pensions and then go out and then start providing complete advice with nothing else happening on pensions obviously, I dunno all the exams, but I know this, when I hear people about doing financial planning, they have to go through all the hours and then I think there’s AFS and all these different things, things that I’ve obviously never sat or been involved with, so I wouldn’t possibly comment on the content, but there’s no at the moment to say with the CI especially, there’s no pathway for someone in protection to go high, four protections to go high, you would have to go, there’s one module on protection, there’s module on group risk, group protection, risk
Roy (36:16):
Else, yeah, G one isn’t
Kathryn (36:17):
It G one, everything else is pensions, investments, taxations, things like that. So obviously the tax ones potentially could be seen as useful, but ultimately there’s, unless you’re wanting to go down fully down a financial planning route, there is no route for someone who’s in protection to really go beyond two or three modules, which is, I think it just makes it seem as if again, it’s like, well, is there just not enough information there? There could be a huge, huge need for things like underwriting and understanding how that side of things works. There’s massive potential there. But again, because of the fact that you don’t need to have these exams, it’s like someone who does mortgages, they’ll do cmap, I dunno how many exams that is, but it’s a number of exams to get the cmap to be able to advise, but there’s just nothing equivalent in protection.
Lee (37:07):
So that’s interesting. Then coming back to this, Kathryn, you talked earlier about perception and do financial planners look down on protection advisors and stuff? Do you think there’s something in this then that, and I say this, somebody was in the forces, the more training you got, the more specialists you’ve got, you looked down on everyone else and with all these terrible terms for each other, but is there something in this then that it’s seen as a law barrier to entry to become a protection advisor by the financial planning committee think, well that’s protection. They can just turn up and start work and we can’t. We’ve got a high barrier to entry. Think there’s something in that.
Roy (37:46):
I think there’s definitely something in that. It’s also, I guess we’ve never really been seen as that sexy an industry. I mean there’s something about wealth that seems to be it’s a bit more respectable and you are helping people build huge, huge amounts of money and that’s always been seen as a sexier. But I think we need to break down these barriers and just, it doesn’t matter if you want to call yourself a wealth manager financial advisor, I think that’s a bit semantics. We get caught up in that too much. Lee, I think we are giving advice to our customers who probably need a pension, an iser, some protection, some PMI, if that’s appropriate, et cetera, et cetera. It doesn’t actually matter, but we should be looking, I know people scream when I sometimes use the word holistic, but let’s think of a better word, but we’re looking at someone’s whole financial life and solution and all of these things come along, which is why those barriers, it’s really important to break down and if it means that we need to bring an exam in to try and make protection, have a slightly more respect that, I suspect that’s a lit part of it.
(38:54):
Part of it,
Lee (38:55):
Absolutely. Okay, so I’m going to embarrass Kathryn here because I believe that we’re genuinely living in age where you can learn just about anything and you can learn a lot of it for free or for very, very little.
Kathryn (39:06):
Are you going to challenge me as to why I’ve not done wealth and pensions? Lee? I was going to say that would be in person.
Lee (39:15):
I might do. No, I was actually coming from the other end and this might embarrass you and it also comes back to this point about by practitioners, for practitioners by advisors, for advisors. I mean the advice for advisors training that you deliver is genuinely top of the tree. So there’s sort of no excuse if the BFS or the CI or LBF isn’t delivering the training and protection, that’s up to snuff. There are other ways to find it. And advice for advisor, absolutely one of those. Now I look at the discounts that you offer through OK October, but I look at the quality of that training. It is super, it’s the sort of training Roy that we got back in the day from life, but it’s up to date, it’s relevant, it’s based on actual case studies and the huge experience. But QRA has built up of doing this and I’m talking to two of the most skilled protection operators in the UK right now and I never was, but I believe firmly protection.
(40:16):
So I think if you want to do the training properly, seek out advice for advisor would be one place. I’m sure it’s not the only one, but it’s the one that I got particularly. And that’s not to embarrass you Kathryn, it’s just to say if you want those skills to be able to do your job properly and you cannot get it from professional bodies, although life cos aren’t doing it. And I remember the training we used to get from life course, right? It was absolutely top of the true, they’ve all shut the technical desks and there are so few fewer companies now around et cetera. The technical desks have gone and the training departments have gone and all that kind of stuff and there’s all the inducements and all that sort of stuff that’s somehow fed, bled into the mix. But I think if you want training and protection, if you want to be the best possible financial planner you can be, you must have protection as part of the canon.
(40:59):
And if you can’t get it from the traditional outlets, seek it out a place like advice for advisors, not to just plug what you’re doing, Kathryn, the other providers are there. But what you are doing is absolutely top of the tree so you can get this skill if you set your mind to it. And I think the thing that sets good planners apart from average planners is they have that constant curiosity. You constantly want to learn it and if that’s not part of your plan, go out and learn it. Or if you don’t want to do that, find a really good advisor that you can sign to.
Kathryn (41:27):
Absolutely. Definitely.
Roy (41:29):
I think the other interesting angle is what happened three weeks ago, isn’t it fascinating? Our whole industry subtly had this huge news story about pensions. So for our listeners, you probably hopefully realized that the pension rules were pretty dramatically changing three weeks ago and suddenly there was loads of publicity, not just internally but externally as well. It was on the front of all the major papers people are talking about, those pension changes out there the whole time. My immediate subject matter that goes hand in hand to this was tax on death because there’s some pretty major changes that were made in terms of that. Why as an industry are we not talking about this? And I talked to Ron Recross about this the other day who totally agreed. He said those pensions changes have a big ramification on what happens on defin and that therefore brings the whole subject back to us.
(42:27):
Why is it that we’re suddenly not talking about the insurance side of what’s changed? It’s all about the pension side in isolation and you can’t have a pensions chat without talking about death, which brings that whole subject up. So the big debate about registered and accepted life trust, okay, yes there’s some group stuff, but conceptually take that over to normal life assurance. You’ve got to be having these conversations. Now maybe the protection industry needed to PR itself much quicker when that happened, but I think this is where the joined up collaboration be. It is so vital. These things are not in isolation, they can’t be.
Kathryn (43:06):
Absolutely. So to come towards the end of the podcast then, do we have maybe each of us, one thing that we wish more people knew about? The insurance world I suppose got silent
Roy (43:22):
Start I think, and I can hear having cars and lots of people’s things in my head at the moment. I think we still need to promote ourselves far better than we do as an industry in that there is this thing called financial advice out there. Okay, I’ve spent the last few months, a lot of my time going out and doing costly living chats to corporate clients because that is the thing that is obsessing quite rightly, most employers in the UK and it’s something they need help with and we’ve got a huge role to play there as we talked about in the previous podcast. But you go along and you talk to people and it’s really well received and they get it and you really help ’em out with things like budgeting and just some really basic stuff and the feedback you get the whole time.
(44:05):
Okay, Martin Lewis has mentioned a lot, but the feedback you get the whole time is we’ve seen this soundbite on tv, we’ve seen some really quick advice on Martin Lewis or whoever it is. There are other influencers that are available to podcasts, but what happens next? And I’ve started talking to people more and more about what a financial advisor is and do you know what particularly amongst 20 and 30 year olds, they just dunno who we are. They don’t really know that we exist. And I think we’ve got to pr ourselves so much better now. We need the insurers companies to help us do that because it can’t just be advisory firms, but there is this mass market solution called financial advice. But if a 25-year-old doesn’t even know who we are, Kathryn and Lee, what hope have we got? And there are some unintended consequences of the RDR Lee and that’s a chat for another day. I know, but my hope would be to get government insurance companies, reinsurance companies, the press all in this sort of collaborative thing about advice is so important because if you look at other countries, it happens there in America there’s a big thing. They have a month of disability awareness month and it’s all about financial advice. I just think we’re too shy, I think is the problem what you do financial, we’re always whispering it into our hands. Let’s promote it more.
Lee (45:25):
Yeah. Listen, I couldn’t agree more. Listen, I love a bit history and historical figures. I love reading biographies and autobiographers and stuff and there’s this fantastic quote by perhaps the greatest orator of the 20th century Winston Churchill. And he said, if I had my way, I would write the word ensure upon the door of every cottage and upon the blotting book of every public person, as I’m convinced our sacrifice is so small, families and estates can be protected against catastrophes, which would otherwise smash ’em up forever. So if the great man wisdom Churchill thought insurance was important, why are we not delivering more of this? So that’s the thing I would change if I could change, if I could wave that magical wand, I would want people to think across the whole advice community and the public to understand that for a relatively modest cost, you are transferring the risk of catastrophe away from you and your family onto an insurance company.
Kathryn (46:28):
Absolutely. And I think for me, probably without, it’s going to sound really dire, but I think for me the key thing is for people to maybe understand that there’s no one else to rely on. The state isn’t going to be there if you are ill and you can’t work statutory sick pay, it’s two and a half thousand pounds to live off for six and a half months. I dunno anyone who could live off that amount of money for six and a half months, especially if there’s a family involved as well. And even after that, if you were then at point of getting disability allowance, which known as the is pip now, I think that it’s not a lot of money. And I think some people might think, well other people, if they’re really ill, they are able to live off it. But I think the point is that there’s living and then there’s living and there’s being able to survive just, but then also taking steps where you can just go, right, you know what, if this does happen, I don’t want to just be surviving and having to deal with all of that health side of things as well as all the financial strain and stress that be involved with it.
(47:34):
I can at least on the financial side of things, take steps to sort of help and as well and going off into a slightly different thing. The thing like the pensions as well, obviously I know I can’t comment on pensions, but again, state pensions, they’re not in a sense reliable, they’re not contractual. It’s all a bit, it’s a funny old world estate pensions. And again with things like the income protection, it’s a case of you can still keep paying into your pension, you can still keep doing your NI contributions if you do want to get obviously the state pension and things like that. So it’s a bit of annoyance now to stop a very significant pain in the long run.
Roy (48:12):
Can I throw in one more wish? I know you can only have one go on then. Can I have two go on then again, this is just anecdotal. The feedback I get from, and I’ve literally spoken to hundreds and hundreds of people over the last six months. The one thing that everybody says particularly in their twenties is could we have not had some teaching at school? Absolutely. And I think maybe not as 11 year olds, but let’s bring something into the curriculum when they’re maybe 14, 15 and just give some basic stuff because people are coming out of our education system and by their own admission ignorant of financial affairs. And actually what people say to me is that because I say, are you sure you would’ve wanted to learn at school? And they go, yes. And they all say yes, that’s my one. That’s probably pie in the sky wish. But
Kathryn (49:02):
Absolutely it’s something we definitely need to address. But I did notice something the other day actually, I tried to apply for it for my children, but then it said you had to be, I think 14, the CI have teamed up with the Duke of Edinburgh to do a, I think it’s a bronze award in the beginnings of financial advice. Obviously that is depending upon the people who are obviously doing the Duke of Edinburgh who can potentially access it. But I mean I’m a governor to the junior school here, Alan’s a governor at the senior school. And a key thing for us is at some point is to try and maybe develop a session or a couple where we can go in and just go and have a bit of a fun interactive thing where we’re not saying pensions and we’re not saying critical illness or income and all this kind of stuff, but just saying right along the lines of, right, you’ve got some money now in the long run, do you want to give me a little bit so that if this money stops, I give you lots back? Or do you want to just keep it all for yourself and just hope? And it is trying to bring it back to those levels where it actually makes sense to them.
Lee (50:07):
I dunno if it’s still going, but we used to support it. When I led Investment Quorum, we supported it and we used to send people along, but the PFS used to have something called Discover Fortunes, which was aimed at school children and learning about money. So I’m not sure if it’s still going, but that might be something to have a think about. But it’s not wide enough spread, it’s too patchy. It relies on voluntary stuff. But I’m with you Roy. It seems ridiculous that there’s no form of citizenship, if that makes sense. Bringing in schools, particularly in secondary school. And part of that would be a bit about finance, a bit about what they card debt and all that kind of stuff. It just seems to me that it’s a big gap in any school person’s curriculum in a way that perhaps we got, I mean I’m much older than you too.
(50:53):
I remember, I keep going back historically, but at primary school, despite coming from a very modest family of modest means, all the school children had a passport and once a week we took a few pennies in and our primary school teacher put the money in our passport and it became this game as to saving up. And it was really interesting. So I think it started really young back then, but we seem to have lost that along the way, which is a crying shame because I think people are coming out of school and unless the parents have helped them, they don’t really understand money, they don’t understand how credit card debt is corrosive and all these other bits of store cards or whatever. But anyway, I’m in danger of getting back on a soapbox perhaps that’s for another day.
Kathryn (51:38):
That’s just reminded me, actually, I probably shouldn’t say this sooner. So I do work in advice and everything, but at the moment I am teaching my children bribery now and with money, I know usually we do that with chocolate with our kids, but I’ve taken to paying them for reading books. So they have their own little, they have their sheets now where they can write down book. They have to say if they enjoyed it or not. One of them gives it a rating out of a number. Another one’s a smiley face, sad face and myth face. And then I give them, we write it down to go, right, this is how much money you’ve earned by reading a book. And they know I’m bribing them. It is trickery on my part, but essentially I’m still winning because they’re reading. So there we go. Well, thank you. That’s
Lee (52:21):
A money lesson, Kathryn.
Kathryn (52:22):
It’s, it’s a money lesson, isn’t it? So thank you everybody for listening and thank you Lee and Roy for joining me today. Pleasure, it’s lovely to have you on. Next time I’m going to have Matt ran back with me and we’re going to be talking about arranging protection insurance for people who have sarcoidosis. If you’d like a reminder of the next episode, please drop me a message on social media or visit the website, practical protection.co uk. And don’t forget, if you’ve listened to this as part of your work, you can claim a Ccpd certificate even on the website to thanks to our sponsors, Okta members, which is Lee’s Financial Networking Company. And I would definitely suggest that you have a good look on that for tidbits and informal networking. So thank you both and I’ll speak to you soon. Bye. See you
Lee (53:06):
Soon. Thank you. See you.
Transcript Disclaimer:
Episodes of the Practical Protection Podcast include a transcript of the episode’s audio. The text is the output of AI based transcribing from an audio recording. Although the transcription is largely accurate, in some cases it is incomplete or inaccurate due to inaudible passages or transcription errors and should not be treated as an authoritative record.
We often discuss health and medical conditions in relation to protection insurance and underwriting, always consult with a healthcare professional if you are concerned about any medical conditions and symptoms we have covered in any episode.