Moving protection to the top of any financial planning is Roy McLoughlin's crusade as he talks about education and the Income Protection Task Force with Lucy Quinton
Roy McLoughlin, senior partner at Master Adviser, is clearly pleased with how business is looking at the moment. He may have a point, having been commended at the recent Protection Review Dinner as an industry personality and winning 'highly commended' at the 2007 COVER awards for protection intermediary of the year.
An IFA for the last 10 years, he was originally an appointed representative at Friends Provident. While most people seem to simply fall into the industry, McLoughlin bashfully admits that in addition to professional reasons, it was his customers who asked him to become an adviser in order to sell them other products.
Master Adviser was established in 1996 and advises across the board while his particular focus is mainly protection and group work. He will advise to anyone but has chosen to focus on the media sector, which incorporates record companies, PR firms, advertising firms and television companies - "the sexier side of things". In addition he also deals with debt counselling. McLoughlin admits he gets a lot out of helping people in this way and sorting out their lives when they are in trouble.
Reflectively, he says: "There is no better feeling than having a client when a claim pays out. You have a client for life and you get a real buzz out of it. That is when you know you do a good job for a living. The irony at that point is that you then tend to get loads of referrals."
In force
When he is not working or being vice chairman of the largest amateur football club in the south east - Old Meadonians - McLoughlin is an active executive member of the Income Protection (IP) Task Force, which is something he clearly relishes. IP is still massively undersold and he believes the IP Task Force has the capabilities to help tackle this area.
While some judge the task force as just a talking shop, it is clear that McLoughlin will fight for its voice to be heard. It is unique as it is the only group that has a mixture of advisers, providers, reinsurers and industry pundits along with Which? and the Association of British Insurers. This is obviously something that should be encouraged to develop into other areas as there is no other group that is so multifaceted. "This is incredibly important as we are all on the same side," he explains, adding: "We are not segmented. We are hopefully working towards the same goal and in protection in particular that is working towards closing the protection gap".
Root of the problem
The IP Task Force's strengths are its white papers and its various relationships with the press. The task force is aware of the importance of being mentioned in the press as often as possible because, as McLoughlin admits, frequently the problem is not that customers do not understand it, but rather the advisers do not. "Unless we start educating advisers on how it works then the message will never get across," he says.
McLoughlin has strong links with the mortgage industry and highly recommends other advisers should start to follow suit. As part of the FSA's Treating Customers Fairly principles based regulation, mortgage advisers should be talking about IP anyway but now he thinks their attention will be more focused in light of the current economic downturn.
"Broadly speaking I think the mortgage market will take a 30% hit and an obvious place to look for an alternative revenue is the protection market," he says, adding "They are finally waking up and smelling the coffee, which is not the way it should be but that is a fact of life. The key thing they need to do if they are interested in focusing on protection though is to get educated in the area, particularly critical illness and IP."
This year is an exciting time in the industry with yet more new entrants planned for later in the year with MetLife and AIG in addition to the fruition of the hotly anticipated Fortis launch. "The protection market is a vital cog in the holistic wheel of financial advice but it definitely needs help," McLoughlin says. As an indication of how committed the IP Task Force is to get mortgage advisers on board, it will shortly admit a mortgage specialist.
In "Roy cuckoo land" he does not see any fundamental reason why the credit crunch should have any impact on the protection industry but in reality he admits it will still be affected because mortgage advisers will begin to look at the protection sector in a new light. There is a train of thought that suggests when uncertain times lie ahead, more protection policies are sold. McLoughlin points out the antithesis of this is when uncertain times are ahead more people become concerned with committing what is invariably new amounts of money.
Since starting his career, McLoughlin feels the market has not moved on in the way it should have done. This is shown by the ever increasing protection gap. He says that while some of the products are now more sophisticated, the fact there is an increasing protection gap shows there is something wrong. He says: "You could argue we are going backwards. I am getting the impression from some companies that they are not looking after employees as well as they did before."
The demise of the direct sales force has also had an effect. Whether that is a good thing or a bad thing remains to be seen but McLoughlin feels that despite having a tainted reputation, direct sales forces are trained well. "You can always tell someone who has worked for a direct sales force because of their techniques. They were trained to sell and are not pushy," he explains, adding that the term "pushy" suggests there is something untoward going on.
Not only is there a genuine concern for the downfall of the direct sales force but he laments that the adviser community is shrinking in general. McLoughlin does not anticipate a swarm of advisers entering the sector, and notes this may be because protection is not the sexiest of subjects to talk about.
He feels there is a lack of new blood coming into the industry because there is no natural progression and it has not been given enough credence. It is all related to financial education. "If we educated people better about the industry then they would have a better idea about it and maybe want to get into it. I advise a lot of young people and they do not have a clue, so part of what I am doing is an education process. This is why the Thoresen Review has to be applauded," he explains, adding that financial services should be taught in schools as it is so important. "It is as important as law and accountancy," he says.
McLoughlin certainly brings a sense of passion and joie de vivre to the cause for greater consumer uptake of protection and to the industry in general. "Protection should be at the top of the holistic tree because if misfortune occurs the potential devastation to someone's life is humongous in contrast to mitigating it with protection," he concludes.
CV: Roy McLoughlin
1998 - to date: Senior partner, Master Adviser
1990 - 1997: Appointed representative, Friends Provident.
