'Look after your clients' business protection needs - if you don't, someone else will'
With 5.7 million businesses in the UK[1] - each with their own specific financial needs - you could be missing out on a great opportunity to grow yours.
According to the Office for National Statistics[2], the number of value added tax (VAT) and/or pay as you earn (PAYE) registered businesses in the UK remains at 2.67 million in the year to March 2018, which is broadly in line with 2017. Seventy-one per cent are limited companies, with 46% of them being single employee limited companies - highlighting a significant number of businesses whose financial viability relies on just one person.
Continuity and succession planning - is there a need?
Yes. Business continuity and succession planning may not be high on the priority list of many businesses. However, losing a key employee could have a devastating effect financially on a business ― what might the implications be should one of the business owners die or suffer a critical illness? And while business succession planning is a key part in protecting the stability and continuity of a business, frequently little or no consideration is given to this planning.
Why would your clients be interested in business protection?
Put simply, business protection is a way of protecting their business should something go wrong. It can help make sure their business continues to trade and allows the owners to maintain control while making sure dependants receive a fair value for their share of the business.
Every business has certain key personnel who are vital to its success and prosperity - someone whose death or disability would have a serious effect on the future profits of the business. With a business protection arrangement in place, if key people become ill or die, your clients will be able to:
- Keep their business trading;
- Replace key individuals;
- Provide employee benefits;
- Protect corporate debt;
- Buy out a shareholder, or their estate if they become critically ill or die, and
- Make sure dependants receive a fair value for their share of the business.
Why should you recommend business protection?
It's important you look after your clients' business protection needs - such as business continuity and succession planning - because if you don't, someone else will. You could be losing out on genuine opportunities to develop valuable relationships, expand your business, and increase your profitability. And with many customers now more comfortable buying financial products online, the value for you, as an adviser, lies in those areas where customers can't self-serve. In this scenario, your advice and ability to create bespoke solutions is vital.
How Aegon can help
Aegon has used its wealth of experience in the business protection market to develop a new online business protection toolkit - giving you all the support and information you need at your fingertips to understand, discuss and write business protection.
The Vault
As part of its online toolkit, Aegon has also created the Vault - your one-stop-shop for all the support material you'll need to help you in the business protection market. This includes sample material, sales aids, technical factsheets, videos and more. All are designed to help you understand the importance of, create the need for and discuss business protection with your clients.
Visit Aegon's business protection toolkit for more information on business protection.
Stephen Crosbie is protection director for Aegon
[1] Department for Business, Energy & Industrial Strategy - Business population estimates for the UK and regions 2018
[2] Office for National Statistics - UK Business; activity, size and location, 2018
