LeadPoint, a lead generation portal, is about to expand its offering and launch into the protection market. What do you think of such an idea, bearing in mind the current economic climate?
Alan Lakey, Highclere Financial Services
The protection gap is widening and the economic downturn will exacerbate this because many consumers will consider protection plans as an expendable cost. Equally, with the mortgage market all but dead, advisers are likely to focus their attention on protection issues.
Advisers without a wealth of existing clients will look for a foothold in this market and a supply of leads may solve their dilemma. LeadPoint is a US company that so far has concentrated on mortgage leads and, not surprisingly, has sought to expand out of this moribund area.
There can be little doubt that qualified leads will prove a valuable resource to advisers but, will the advisers be of value to their prospective clients? Recent years have seen an element of polarisation with firms concentrating on mortgages or the chic wealth management area. Without protection there may be little potential for a mortgage and no wealth to manage. Despite this many advisers have drawn back from what is increasingly seen as a dull and fruitless market.
Can mortgage advisers and wealth managers advise on protection in a competent manner or will they fall back on selecting the cheapest provider? They may get away with this on term life but not with income protection and critical illness insurance.
The FSA may be right that any cover is better than none. Perhaps.
Peter Le Beau, Le Beau Visage
LeadPoint appears to be a professional and focused company specialising in lead origination. Some, including myself, may shudder at the prospect of a lead seller available via a portal because of concerns this may lead to buyers obtaining leads without having a clear idea of the needs of the people involved. There is also the issue that the industry may see greater commoditisation in some product areas where cheapness does not always equate with value.
Great businessmen often tend to act in a contra-cyclical way so entering a new market during the credit crunch may turn out to be a stroke of genius but my heart did not skip a beat when I heard about LeadPoint's entry to the market.
In my opinion people buy leads when they lack a natural client bank and it will not be easy to ensure the advice given, to what is likely to be a disparate group, is appropriate. If advisers need lead sellers to survive they may be in the wrong business after all.
I would add a concern that in a world where we spend a great deal of time qualifying leads and preparing detailed fact-finds the mere existence of a lead is not tantamount to a quality introduction of a potential client. A lot of the histories they may generate might be problematical and unsuitable. I suspect this may be a development we need to treat with caution.
Ian Brown, Skandia
It is widely known that people in the UK are not placing enough importance on their protection needs and any initiative that may help change this situation by getting more people to think about it would be welcome. It is good to see emphasis being placed on CI cover as this is an important part of protection planning that is often overlooked.
It would be good to understand how lead buyers are vetted to ensure the end consumer receives the best level of advice available to them. If all protection leads are placed with advisers that have access to the whole of the protection market that can only be a good thing for the lead seller and the end client.
Protection is often considered a straightforward product when compared with investment or retirement planning but this area of financial planning can be complex because of the variety of products available. Clients will not always look for a straightforward term assurance product. They may look at business protection or using protection products as part of an overall Inheritance Tax planning process. Selling protection products with advice ensures nothing is overlooked.
Skandia strongly advocates that protection products are sold with advice. An adviser is best placed to assess the overall protection needs of a client and can recommend a suitable strategy. Such a strategy would ensure a client pays for the right type of cover at the right level over the right term.
Justin Harper, LV=
Protection is not often considered a core activity for mortgage advisers. But with the credit crunch starting to bite and the housing market stalling, the pressure is on mortgage advisers to find alternative revenue streams.
LV= welcomes the move by LeadPoint to expand its offering. From conversations with advisers LV= knows there is greater openness and appetite to explore protection. So hungry advisers will appreciate LeadPoint's service for generating leads.
Furthermore, it raises awareness among brokers about the need for protection and the solutions available. And of course it provides opportunities for intermediaries to talk about the important issue of protection, especially in the current economic climate, and through sound advice, offer their clients valuable cover.
However, it is important advisers do not simply go for the easy route but consider the options available and select the most appropriate cover built around the client's individual circumstances. LV= believes it has an excellent protection offering with its Mortgage and Lifestyle Protection. It offers high quality long-term cover, is quick and simple to recommend and offers great rewards with upfront commission terms. So in this difficult climate, advisers are better positioned to increase business levels by using the services of LeadPoint to provide quality, affordable cover for clients.
