I am an IFA and previously I was a tied agent for a bank. I am now considering setting up on my own. I have a lot of knowledge and experience in protection but I am considering branching out into private medical insurance (PMI). Is this a different mind-set and skill-set and what do I need to know to work on both?
PMI and protection are very much connected around health, wellness and all your protection requirements around health and wellness, such as being out of work, and life insurance for your family. That to me makes PMI a very natural and logical extension of an advice conversation with the customer.
The skills of advising people are no different whether its PMI or protection, the basic principles are the same.
There are technical differences and I would say the trade-off here is you have to invest time to make sure you understand the technical differences between products.
I would argue it would give you a better understanding of your customers and your fact find would be broader than one market or product area, that gives you the opportunity to develop a better customer relationship across a broader range of products and should help you with customer retention and gives you an opportunity to generate more revenue.
Emma Thomson, Lifesearch
PMI and protection have commonalities so are sometimes seen as natural partners; they both fill in gaps that exist in state provision and both involve taking into consideration health issues. It is good that you are thinking about your customers’ wider needs, however both can be complex and they have distinct differences; you will have a lot to learn in order to give advice on PMI as well as protection.
If you plan to revert back to being a tied adviser, then advising on both PMI and protection is possible as the breadth of knowledge required will be much reduced. There are providers that offer both protection and PMI products, although you will need to have some degree of knowledge of PMI at outset to ensure you successfully choose a provider that offers cover that will appeal to the type of customers you are aiming for.
If though you plan to remain independent, my recommendation would be to specialise in protection as that’s where your skill set lies, and to partner with a specialist PMI intermediary so you can refer customers who are interested in PMI to them.
Many intermediaries successfully do this. To give whole of market advice on protection requires a lot of knowledge given the sheer number of options available, especially as products are regularly updated, and the same applies in the PMI market.
This is why I would not recommend you advise on both, unless you plan to go down the tied route.
