How to use annual reviews to give every client peace of mind
by Damian Davies on 14·11·2022
MiFID II has been around for a few years now.
Regular review reports are being issued confirming the ongoing suitability of the products advised, confirming the ongoing costs and charges, and make recommendations regarding changes to the asset allocation of portfolios. This is all great and offers a good ongoing service to clients and shows the value to the client for paying for ongoing advice.
Client’s circumstances regularly change and whilst we can focus on the assets being advised on, it is as important to look at the wider situation for the client; particularly ensuring they have financial security for themselves and their family. After all, most people will have insurance for their home, car, pets, and mobile phones but never enough insurance for themselves.
Aviva undertook a survey in 2019 of 500 people who had lost a spouse or partner in the last five years. 65% of the respondents said that there was not enough life assurance in place!!
The review is a brilliant chance to look at changes in circumstances that have happened since you last met and make sure clients and their families are protected.
Getting Married / Having a Child
No longer just responsible for their own financial well-being, getting married or becoming a parent means an individual is now responsible for others and financial security for the family should be a high priority. A lump sum or regular income could allow the surviving spouse to continue in their current lifestyle without worry.
This could be ensuring they have the work life balance they desire, having an emergency fund for unexpected expenses, or not having to change their spending habits. Most importantly, it gives them financial peace of mind.
Getting Divorced
A very stressful time and one where looking at what protection plans are in place may not be a priority.
Joint life cover may no longer be required but it may be that new cover is now necessary to ensure any maintenance payments can continue, particularly where young children are involved.
Maybe a new house has been purchased so extra cover is required here.
Moving House
Buying a home should almost always result in some form of protection being put in place. Preferably life assurance and critical illness protection. On moving, this protection will need reviewing to ensure it is still suitable. Is there sufficient cover for the new mortgage amount? Is the remaining term on the protection plan the same as the new mortgage?
Changing Job
Some people are fortunate to have a job that comes with lots of benefits. Death in Service, Income Protection, and even Private Medical Insurance are the key ones. Changing jobs where the benefits are not matched like for like could result in a drastic reduction in the amount of protection an individual has in place.
There may be a need to implement new life assurance, critical illness, and income protection plans.
Alternatively, there may be a need to review / cancel existing cover to ensure they are not over insured.
This will be particularly relevant for income protection plans where the amount of benefit is based on earnings.
It is great to ensure clients’ assets are being advised on, but those assets need foundations, so knowing that your client and their family will be looked after in the event of death, serious illness or being unable to work over the longer term due to accident or illness is more important.
It’s better to have it and not need it, than need it and not have it and if you told them to have it, that’s worth it’s weight in gold.
If you are interested Damian will be hosting two webinar dates:
Tuesday 29th of November 2022 11.00 (UK)
Thursday 1st December 2022 14.00 (UK)