Protection markets are ripe for change. Paul Robertson interviews Iain Clark of LV= and suspects the company intends to be at the forefront.
There has been no great sea change in advisers resulting in a lack of protection expertise, but it is fair to say that successive financial scandals and a poor image have affected recruitment.
“I was just talking to a network on Friday about this,” Clark adds. “I asked them: ‘What is the average age of your adviser base?’ It is about late 40s, early 50s. So I said: ‘How many people have you got in their 30s?’ They said: ‘Probably about 10% to 15%’. I asked ‘How many have you got in their 20s? They replied: ‘I think we have two’.
“That is a problem. Our business has a mature adviser base that possibly 10 or 15 years ago was very much on a roll, taking business in, mortgages were high, penetration on protection was quite easy to do.
“If we are not careful, those late 40s, early 50s people are going to retire in 10 years’ time, and we just do not have another generation coming aboard to actually follow up what needs to be done.”
Educating the networks
It is fair to say that some of the networks are trying. There are a few now that are offering training and ‘academies’, but it is a difficult one to manage.
Traditionally, the industry replenished its adviser stock from the banks, from the tied agents, and they too are ditching advice. But does this mean a return to the man from the Pru is likely?
Clark is emphatic: “No, that is not the model we have in our plan. We have more than 30 telephone account managers and we have 10 business development managers. Part of their role is to educate and to serve the networks; to get them to understand how to sell and why products are important for individuals.
“But we just need to make sure that such information is bedded into them, rather than they just see it and then they move on and go back to their normal work patterns.
“Education is king out there at the moment.”
Of course, the elephant in this particular room is the internet. Used correctly, this could be a major form of future distribution, something that the aggregator sites have noted. They are beginning to agitate the providers to produce more internet-friendly products.
“It is something that all providers are looking at,” Clark says. “I think there is a very big argument to say we need to engage better with our customers and possibly make products simpler.”
Essentially, the scenario is that most people are not going to have an IFA, because they do not consider going to one. Therefore, the only place to get insurance will be on the web or through their bank assurer.
Simplifying process
Clark agrees: “We have got to make that process simpler for the general public, to understand why they require it. We need to be able to facilitate an understanding or a recognition of what life cover, critical illness, income protection, means to a customer.
