S1:EP6 - Integrating Income Protection with Sarah Parkin of Hollybeck

In today's episode

What if you could seamlessly incorporate income protection into every financial plan you develop? Join us on this episode of "Let's Talk IP" as we chat with Sarah Parkin from Hollybeck, a seasoned expert whose journey from TSB Bank to the Mortgage Advice Bureau has made her a passionate advocate for income protection. Sarah shares her extensive knowledge on transforming income protection from a separate product to an integral part of financial advisory, offering a fresh perspective on how to enrich client relationships and improve their financial resilience.

In #AskIPTF this week, Matt answers burning questions on clients refusing protection after sorting out their mortgage and overcoming issues around exclusions on Income Protection. 

Then,  in Matt's Top Tips of the Week - Matt delves into income stress testing with clients, embedding it into the advice process, leaning into the value and continuous professional development.  

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Produced and edited by SEA Studios

Transcript

Speaker 1 0:10

Hello and welcome to let's Talk IP by the Income Protection Task Force, the podcast that shines a light on the often overlooked but vital insurance income protection. I'm your host, matthew Chapman, aka the Protection Coach, and welcome to Season 1, episode 6 of let's Talk IP. Welcome everyone and thanks for tuning in and a huge thank you if you're someone who's listened to every episode of the podcast so far. And if you have, why not tell us about what you think about it or ask a question at that hashtag, askiptf? We've only got two more episodes to go in series one, so please get your questions in now. If you want to send a voice note in, just do so on 07442 247 280. That's 07442 247 280, and don't forget, you can claim unstructured CPD points for tuning in today, so write down what you learn and please claim those points Now, with our focus in May being on seven families coming to an end, although, if you haven't checked out the 10-year anniversary video, please grab a coffee today and watch it. It's 45 minutes of incredibly powerful stories and thoughts and you really don't want to miss it. Link is in the podcast description. Our focus now turns to iPore. Yes, the 100-day countdown is nearly here and this year's iPore is going to be bigger and better than ever. You'll be hearing lots more about it in the future episodes, but for now, let's see what's coming up.

Speaker 1 1:33

So in this week's interview, we're talking to Sarah Parkin from Hollybeck. In this wide-ranging interview, we discuss some great tips, including how to integrate and embed income protection into the advice process, and that's to avoid it being treated as a separate product, something I talk about all the time. After that, we'll be answering some of your burning questions in hashtag AskIPTF. This week we have questions on attacking clients objecting to protection after securing their mortgage and around protection exclusions, and, of course, we finish up with my top tips of the week. You know all of these, but for now, let's get straight into the interview. Here we go.

Interview with Sarah Parkin from Hollybeck

Speaker 1 2:04

Top tips of the week. You know all of these, but for now, let's get straight into the interview. Here we go. So, sarah, welcome. Welcome to the let's Talk IP podcast. Great to have you on today. Thank you very much for joining me. So first thing I'm going to do is ask you a bit about your career history, because I understand that you've been in the industry for quite a while, so tell us about how you got into the industry? Have you always been an advisor? Is this something that you sort of fell into? Tell us a bit more about your history.

Speaker 2 2:27

Hi Matt. Yeah, thank you for having me. So I started my career at what was TSB Bank and progressed into being a mortgage advisor there when we merged with Lloyds or Lloyds bought TSB, merged with Lloyds or Lloyds bought TSB, and then obviously they split off again. But I was an in-house mortgage advisor for Lloyds to start with, did a little bit of protection, but not very much. And then I moved over to Mortgage Advice Bureau, but a small branch in Derby, a small franchise of Mortgage Advice Bureau, and that's when I started advising properly on protection, which would have been about 2001 to 2002, something like that.

Speaker 1 3:07

Wow. So I guess you've seen an awful lot of people live through a couple of recessions and big changes in the industry. That's fascinating. So one of the things I love to do when I have guests on is I ask them about why. Because there's always a moment, there's a point in everyone's career where they suddenly either see the light and they see the value of income protection, or they go through a claims experience or they have a client needing to claim. There's usually something that happens in someone's life that makes them suddenly become an income protection advocate more than they were before. Is there a moment like that for you? What's the why that you've got?

Speaker 2 3:38

To be honest, I don't think there's been a pivotal moment, I've just always sold it. So when I worked at the franchise of Mortgage Advice Bureau, we had an amazing guy there called Graham who from the start was the protection coach, if you like. You know he did all the sales training and he always taught us about, you know, putting a package together. So income protection always featured within that. But what's interesting is how the product has changed over the years and that's really helped to cement, I guess, my enthusiasm for the product. Because back then we were an LNG tied agency so we could only sell legal and general income protection. Back then they only really wanted occupation classes one and two and you were trying to fit a square peg in a round hole most of the time. So then when I left that franchise and actually set up my first brokerage and we went whole of market, it was just like a light bulb because of course you don't know what you don't know. So we didn't realize the products that were out there. And I can remember we were sort of then introduced to the Friendly Societies and we were just excited and I know it sounds so sad, but all of us were just going back over our back book of clients ringing all of our sort of occupation class threes and fours and saying, look, we need to review your income protection because we could only do legal in general. Now we've got the whole market and I can save you money, I can get you a shorter deferment period. You know it was, and I think, having the open market to look at which again, at that time there were still the complexities around own occupation any occupation, so it not moved on to where we are now.

Speaker 2 5:31

But yeah, as somebody who has always been an advocate for protection, to have that breadth of product, um, and we just sold so much of it because so it was just. We were just back speaking to clients doing what we should have been able to have done for them the first time around but just didn't have the products to do it. It's just in our dna as advisors, you know, I mean myself and fiona, my business partner we've been advisors for a similar amount of time and we, you know we always have always been massive advocates and income protection's always featured so heavily in it, because it is the one thing that underpins everything else. Honestly, I don't get it when people say they don't recommend it or talk about it or understand it. I don't get it. So you know, hopefully people listening to these podcasts and getting involved in income protection, you know it will increase sales, because I think it's our responsibility as the advisor community absolutely.

Speaker 1 6:28

I couldn't agree with you more. Ironically, I'm going to wonder if you want to come and present this now, because you did that so brilliant to hear the takeaway for me because obviously I'm a coach myself, so I tend to go organizations and I try and teach them exactly what you were just saying, which is the right way to go about your protection recommendations, starting with the essential ones, building on top of it.

Speaker 1 6:49

You know, almost, if you remember that hierarchy model, we've got turning it the other way, so we're actually focusing on income first and then building on top of it. But what I love to hear about what you said is that there's this thing about if you think back to how you've become so passionate about income protection. You were fortunate enough to be in a business where the people you were learning from were themselves passionate about income protection, and I suppose there's a takeaway there for everyone listening, which is it's very easy to think that the world in which you occupy the firm that you're currently working in is the universe when it comes to what you know. And what you said that I've wrote down is you don't know what you don't know, and so the point here is we're all influenced by the learning models that we deploy. So if we're in a business and we're learning from a particular individual, we're learning how that person goes around doing protection, and if we're learning bad habits, bad traits, bad prioritization, we don't really know any different until we're exposed to a different environment.

Speaker 1 7:42

So for you, when you went into that whole market, yes, you were already an advocate for income protection, but then you saw another world all together in a different unit, and so there's some learnings there, I think, for anyone listening, which is always go outside the environment, go outside your comfort zone, challenge yourself, keep learning, have that learning mindset. That's fascinating. So, given what you're saying, that you've been obviously advising for many years and you've kind of gone through these different routes and you now got your own firm with your business partner, fiona. What I'm interested to know is, as an advisor and having been in the industry for so long, what have you seen as like major changes in the industry whilst you've been working? What are the key things that you've seen that are now different to when you first started out as an advisor?

Speaker 2 8:22

I mean around IP. I would say the has has got a little bit simpler to understand. I mean, I know we've got long term and short term, but around the sort of any occupation and own occupation and I think that was a big thing that used to put advisors off was advising a product that wasn't fit for purpose. Um, and you know to know that you can advise somebody and set up a product that is, you know, own occupation. We always talk in protection, don't we, that we're selling a promise, you know, and until that, until a claim arises, that's then when you know is this promise, is it what I've paid for? And we never want a client to be in a situation where they're making a claim and because they've not hit three out of the five activities of daily living, they're not. You just can't be, you know you can't be a good advisor and work to those rules. So that's the big thing, I think, simplification of the product, which, again, you know it's really interesting because 10 or 11 years ago or so, before I had my two kids and life changed dramatically, right, I used to do quite a lot on the protection scene.

Speaker 2 9:30

We won quite a few awards at my previous firm and I really enjoyed, you know, being around my peers and we were talking about changes in the industry, and then I had my children and sort of stepped back into the work you know, always been advising, just been getting on doing the do really, but not had time to do the networking and everything that goes with it. And you know, not much has changed really. So products have changed and income protection does seem simpler in many ways. They've stripped out all the bad stuff and it's all look, let's be fairer and clearer for the client, but we've still got the protection gap. We've still got this massive problem that people just aren't getting the advice that they need. And so you know, yes, the product's changed, but the landscape hasn't that much really, which again, is, you know I just why yeah, why?

Speaker 1 10:22

that's a very good question, one that we're all hoping to how we're going to do it, but encouraging signs, right.

Speaker 2 10:29

So there are massively and income protection sales are up, are they Obviously? We've had some research come out this year that's sort of said that IP sales are definitely up. So yeah, the message is getting out there, but I think compared to where I thought we'd be, we're not really.

Speaker 1 10:44

Absolutely. I mean, there's been some I don't know how to put this without sounding insensitive but there's been some helpful things happen, such as COVID, because although COVID was disastrous for many people, it was also a big wake up call for a lot of people with income shocks and vulnerability. And there's been a couple of sort of influencing factors, such as rising living costs, that have brought the need for regular income and income protection in particular, to the fore, consumer duty being one of those things as well, you know, in terms of making sure people are protected from foreseeable harm and able to take out and sustain the kind of products and debts that they're inquiring. So, yeah, there's definitely some encouraging signs, but you are right, there's not been a huge change in the industry over the last 10 years, and I think we're all pushing to see that, because I don't think there's an advisor out there, as you quite rightly say, that doesn't want to see that protection gap shrink, because that's the reason we get up and do what we do every single day is to try and get more people, more households, more families protected.

Speaker 1 11:38

So, no, there's a really interesting point and it's encouraging to see the change, but obviously it's also quite sobering to hear someone who's been in the industry for as long as you have noting that there's not been any kind of major, significant step change. So the question then is what can we do as an industry to make that happen? One of the things I'm going to ask you, if that's okay, is if we can think back to the idea that you've been doing the job for, say, 20 odd years now, advising on protection, having moved out the branch environment, which I imagine was a very different experience. What's the one thing that you wish that you'd been told as an advisor before you started selling IP? That probably would have helped you see the value of IP quicker or better.

Speaker 2 12:17

It's hard to answer because I've always seen it as a really important part of somebody's protection toolkit. Do you know what I mean? It's just always been there and we were always. You do the IP and then you'll bolt on what kick you can, based on affordability. And you know, you know the amount of conversations that I've had with clients who said, oh yeah, I need some life cover, but they don't. You know, they were single, they were first time buyers or you know that wasn't the priority. So I don't know.

Speaker 2 12:47

It's difficult to answer because I can't remember a day when there was a penny. It's difficult to answer because I can't remember a day when there was a penny and I've always found it quite easy to talk about and um, because you know, ultimately, if you've not got your income, you've not got anything, have you? I mean, it is that simple, isn't it? It is that simple. I mean and you've probably heard this a billion times and you know, for those of us who've been around a long time, you know the analogy of the um if you had a machine in your living room that chucked out a thousand pounds a week, would you insure it? Yes, you would.

Speaker 2 13:17

You know, well, you know, and you are that machine, so why wouldn't you insure yourself? And it's such a cliche. You know it's almost like your widow story back in the day, but it is true and I don't know whether or not. From years of doing it and talking about it, I've just got a confidence now where I don't mind the. You know the difficult conversations with a customer. You know it's never an issue because it helps you get to where you need to be. You know, in that discussion, but yeah, you know I don't, yeah, I don't mind talking about it.

Speaker 1 13:51

It's so lovely to hear because it's rare that I come across advisors who've always and certainly for the length of time you've been advising been so passionate and clued up about the importance of income. Points in my advising career where I I wouldn't say I had light bulb moments, but it became really stark and really clear very quickly about the importance of income. Now I'm not going to get into the personal stories of why I'm so passionate about income protection. I think I did a post recently about a homeless person that I met in Birmingham and that's one of the main reasons why I became a huge, passionate advocate for income protection. But conceptually speaking, there's two things. One, in the business I had, we were doing very early stage mortgage inquiries for people that were looking to buy new build property first time buyers trying to get on the property ladder and make use of government schemes and they were coming to the business and they were probably way too early to even think about borrowing money because they hadn't even accumulated deposits early to even think about borrowing money because they hadn't even accumulated deposits. And we found that what we would do is providing almost like a get mortgage ready service for them where we're saying, right, well, you need to get these documents ready, you need to build up a deposit of this, and the one thing we're saying is look, what you really need to do is protect your income sources, because your income sources forget the fact that you're looking for a mortgage. Your income sources are the means by which you can accumulate this deposit. They're the very means by which, when you come back to us, we're going to use and leverage to go and get you a mortgage and at the end of the day, if you don't have an income, we're not even going to sit down and have a conversation with you and I said this to an advice firm the other day about if your client didn't have an income, would you even sit across the table from them to discuss a mortgage? They were like, nah, we wouldn't waste our time and I go. So why are you protecting the debts and not the incomes first? And it was like a bit of an eye-opening moment for them and I suppose one of the other things that I've been thinking about that I find really fascinating.

Speaker 1 15:40

And this is just taking that same concept of what you said about the cash machine and almost reframing the value of income, and I wish I'd thought about this and known about this in my earlier career is that I was talking to someone else about the value of income and it's like what price or value would you put on your income? Because this is the question around is income protection a cost-effective or viable, valuable product? What price would you put on your income? And most people are like I don't know, that's really hard to quantify, isn't it? You kind of go, okay, well, what about 200 pounds? They go oh, I don't know, that's a bit much, isn't it for income protection? You go okay, let me just reframe this for you. You get up and you spend a third, a third of every minute and every hour that you have in your life that you could be spending with your children, with your wife, with your friends, with your family, doing things that you love in the pursuit of income. So what's worth more? A third of your life, or 200 quid. And suddenly we're reframing it and it's like, oh, my god, I wish I'd known these things, because that would be such an easy contextual way to get something to go. Do you know what that's really, really valuable? And there's one other one I'm going to give you.

Speaker 2 16:45

Sorry, I'm sorry no, no, no, no, no, I've got. Yeah, I've got one for you in a second we're sparking a conversation.

Speaker 1 16:51

This is the fascinating one. There was an advisor the other day that was coaching and he came back to me and said I went off the back of this idea that you had Matt, because I talked about you know, would you take a 5% pay cut if you could guarantee your income for the rest of your life? And most people go yeah, of course you would, because income security, it ain't going to cost you anything like that. Incompetence is about 2%. And the advisor took it one stage further and he was chatting to his mortgage client and he said to the mortgage client look, you might think this is expensive because they were pushing back on cost, but let me just put this into context for you, you're spending 28% of your earnings on a debt, a mortgage, and we're talking about spending 2% on protecting the very thing that enables you to get that mortgage and pay for it. And the client's gone, oh God. And straight away they're like yeah, now I see the value of it.

Speaker 1 17:38

Sometimes, as advisors, we forget it isn't the product, the product's the solution. It's the byproduct of what we're doing right. It's not the product, it's what are we offering the client here? Financial resilience, income security, the ability to borrow, pay their bills. Whatever that is, we've got to learn as advisors. That's the best way to bridge the protection gap by drilling down into how do we add value to income and remind people what it is they do in the pursuit of it. God, I'm dying to hear you.

Speaker 2 18:04

Now that's a really good one. When we talk because we're a mortgage brokerage, so often we'll do the protection on the back of the mortgage, and when we're talking to anybody, and especially first-time buyers, we talk about protecting the deposit. So you know, yeah, you want to be able to pay your mortgage, but let's not forget that you have just worked really hard to save up 30 grand, 40 grand, and if something goes severely wrong, then that house gets repossessed and you don't get market value for it. All of your hard work then is under threat and it's again. No one wants a mortgage, no one wants to protect a mortgage and, like you've said, it's turning it on the other side instead of saying, look, and I always talk about DIY, sos and programs like that and I just think, look, it doesn't have to be like that, like, don't get me wrong, you feel so, so sorry for people who are in that position, but there are. You know, whenever I see stories in the media and I always think, you know, often there are solutions for these problems or there were solutions, but they just either didn't know about them, which is probably the case because not a lot of people access financial advice, and that's why, you know, when we sit in front of a client, we have a responsibility. You know we have a responsibility to educate our customers about what's available. If they choose at the end of that not to do anything about it, you know we've. I was at a conference the other week and there was what did they call it like the pavement test or something. You know, if your client walked past you on the pavement could you eyeball them and know that you did a really good job. You know, and have that, you know, that security, that peace of mind for yourself, for your business, to think. I looked after you and I really made sure that if anything goes wrong in your life you're going to be all right. And I really made sure that if anything goes wrong in your life you're going to be all right. And I think sometimes as advisors, you know, we can be so quick to get the mortgage done or just not to place enough emphasis on the protection side, and actually no one wants to be that advisor that gets a call from somebody and said, sarah, my husband's, you know, ill or I'm ill or whatever. Did we take anything out? Well, no, sorry, oh God, did we even have the conversation. You just, you know, with consumer duty anyway, you know it shouldn't be happening, but yeah it is, it's.

Speaker 2 20:22

It's interesting what you're saying, because it is about how do we get people to, especially now, because it's different people buy differently. You, you know, you'll know anyway, that people do a lot of research before they decide to buy something. So they'll be looking and reading online and videos and watching. You know, whatever they, however, they're going to consume that information. So we've got a we've got a duty of care to make sure that we're providing them enough information so that when they're ready to make a buying decision with us, you know we've done a good enough job, that we've sort of explained everything properly.

Speaker 2 20:55

Um, and yeah, and I think you know, for a lot of advisors it's just a last minute slapdash conversation. It comes at the end, it's not thought about at the beginning and it's got to be part of the process literally from the moment, like what you were doing. You were talking about protection before they'd even sat down and had a conversation about the mortgage, which is great, and we've never really done that, although we have started income protection policies for clients, where it has fallen through because we're like, well, that's not even linked to the mortgage. That's got nothing to do with the mortgage. So, look, we really still need to do this for you. But yeah, it is a pivotal part of your budget planning. It's got to be talked about at the beginning, so I've gone off on a tangent there, but um, you know what it's.

Speaker 1 21:38

It's so refreshing for me to hear this because you clearly think very much like me. You know like missed opportunities and making sure that and I did one example recently where I was speaking to one about when you've got new build clients buying a new build property, you know you you're doing these 28 day exchanges knowing there's going to be a nine month build window, for example, what happens if their income stops during that nine months?

Speaker 2 21:58

And a lender will accept income protection benefits. Indeed, it doesn't mean that it's all over, you know, but it would do if they weren't getting anything. You know that could save the sale.

Speaker 1 22:10

Full term income protection plan for the term of the mortgage, by the way, guys, which is why you should be selling full-term cover, not short-term cover. But yeah, just an absolutely brilliant point, sarah. I mean what I'd love to do because, listening to you, you're clearly very articulate, you're clearly very passionate, you're clearly very experienced about bringing up income protection in your advice processes. And I love what you said about it being embedded, by the way, because for me, that's the one thing I teach every advisor I coach is it shouldn't be a temperature change, a sudden right now we've done your mortgage or now we've done your investment strategy, let's protect you, because it shouldn't be like that. It should be one and the same, it should be part of that same advice process.

Speaker 1 22:49

And I love what you said about that because for me, embedded advice is the answer, because you don't get that same objection or the same pushback or the same sudden uncomfortable conversation with the customer, because it's integrated in what you're talking about at a time when the client still hasn't got what they want from you. So it just feels more natural. But, as someone who's clearly very good at it, because I'm listening to you speak and I'm loving everything you're saying and even the way you present. It is really wonderful. If I could ask you then, what would be the number one tip that you would give, say, mortgage advisors, because they're obviously sitting in the same world as you. What's the number one tip that you'd give mortgage advisors out there about how to really engage your clients with income protection? What would you say to them?

Speaker 2 23:34

So I would say that it is just absolutely vital to talk about it from the very beginning. So I think it's all in the initial meeting, the initial call, whatever it is, and just setting yourself up as that whole professional. Yes, you've come to me for a mortgage, but actually I don't just do mortgages, I am a financial advisor and I am going to help you and your family to keep this home if anything goes wrong. So, yes, we're going to talk about your mortgage, but we're also going to make sure that we talk about some of the other products that can sit alongside. So I just think you know, really work hard on your introduction.

Speaker 2 24:08

Whatever communication you send out to a customer at the beginning of that client journey, we're just I say just, we've been developing videos for about 18 months and it just seems to take forever and never really I've got too many plates spinning. But yeah, we're going to have a series of videos that the client receives right from the beginning. That just cements the our duty of care to them so that they can see. You know, the difference when you come to us is that we're not just going to sell you a debt. You know, however we decide to frame it. We're going to actually look after you and I just think again in the advisor's mind it's you're doing a wonderful thing for somebody. You know if it goes wrong, they will love you forever. And I've got some clients who have claimed under various circumstances and they are so grateful. I've never had a call from anybody to say, oh, I wish you'd not sold me that. You know, like even the ones that are just still running. So, yeah, it's just you've got to talk about it from the beginning and if you're not confident in talking about it, then just keep doing it.

Speaker 2 25:12

You know, learn, and I think confidence comes from knowledge, doesn't it? You know, learn, and I think confidence comes from knowledge, doesn't it? You know, if you don't feel confident in the product, it's because you probably don't understand the product and its benefits. So surround yourself with other people who are good at it. You know there's plenty of business to go around and there's plenty of experts out there. So, you know, while we can't all learn from each other to be a force for God I don't know, you know, but it's true. You know there's plenty of business. There's an 80% protection gap. For God's sake, we've all got to fill it. So, yeah, it's 100%.

Speaker 1 25:44

Do you know what you're saying? It's funny because everything you're saying really resonates with me. These are all things that I talk about in my coaching sessions and it's wonderful to hear it from someone else who's doing the job, because these are things that I just keep banging the drum about. And it's really funny what you said about. There is this perception from mortgage advisors. A client came to me for a mortgage and I did a post a while back and it was a little bit provocative but it was kind of saying to mortgage advisors the reality is they didn't. They didn't come to you for a mortgage, they came to you because they want to buy a home it's just the mortgage to be the byproduct.

Speaker 1 26:14

They nobody wants a debt, right? Nobody actually wants you to lumber them with 250 grand's worth of liability. It's just that if they and the truth is, if they could pay for it outright, they wouldn't come and see you in the first place, they wouldn't even darken your door. And it's really funny that you say it, because it's true and it's just then about going okay, right. So if the goal is the house buying the home and staying in the home, how can we use that professional duty of care?

Speaker 1 26:38

We've got to help the client achieve that objective, because that's the real objective. And if we align the protection as a tool to help them achieve it and it's their objective they're going to be far more likely to take it. Rather than, yeah, we've done your mortgage, now I need to protect you from the debt, it's like no, let's help you, make sure you can get this property you want, and we're going to do that by making sure you're financially resilient enough to be able to borrow. Then we're going to help you get the debt and I'm going to make sure you can always pay that debt. Now, no client's going to go oh, no, leave me alone. They're going to say yes, I like that because what you're offering is linked to what I want to achieve right. And this is just the fundamentals of giving advice.

Speaker 2 27:20

And going forwards for that customer as well. You know, if you've protected the income and something changes in their life, you know it might be that they, a couple, separate. It might be that they decide to, you know, buy a smaller house, a bigger house. The life and critical illness cover that may have been set up as a result of direct action of that mortgage, yeah, that's probably going to get changed. But the income protection, if it's had indexation on it and it's kept in line, ultimately that's not going to change. So from a sales point of view, from a commercial point of view, for your business, the chances of a policy lapsing on an income protection policy is far, far, far less because it's not linked to the mortgage. And again, that's how you would sell that to the client when you're sort of giving them all the information that, yes, you've come to me for a mortgage, but let's look aside from that, we're protecting your income and yes, the mortgage is one bit that gets paid but you've got all your bills.

Speaker 2 28:16

Know, even if you go on to rent a house, you're still going to have your income damn right so you know, from a long-term point of view, as a business as well, it's, it's a more solid sale it is and it's actually it's it's less likely to to lapse, as you say.

Speaker 1 28:29

it's actually harder for other brokers to come and steal from you because that's only you know. Know, because you've got a relationship with them, because, as you rightly said, you've gone through the educational process, which means you've added value and authenticity and you've demonstrated your wares as an advisor. And I think this is a key point and I think you've kind of really touched on it beautifully which is most advisors and I'm talking about mortgage advisors see themselves as a mortgage advisor and then a protection seller, and there is no difference in my mind. There is no difference. You're either a mortgage and protection advisor or you're not an advisor. And that means you give the client advice, you give them instruction. You don't ask them what they want other than the old main goal that they've got. Your job is to say right, looking at your circumstances, this mortgage product is the most appropriate for you and looking at your financial situation, these financial resilience solutions, ergo income protection is the most appropriate for you. That's what we're going to set up and do for you. That's advice. It comes from education and knowledge and imparting wisdom. So, as you said earlier, sarah, the client can then make the informed decision with all of the information to hand so they can know they're doing the right thing for themselves.

Speaker 1 29:37

And I think that's where advisors go wrong. Is that, weirdly, they say, well, I really struggle to sell protection because that's exactly what they do. They go into sales mode, doing something they don't feel comfortable talking about because they can't deliver value on it, and it just becomes a commoditized, product-based sale. And then they go oh, actually, do you know what? Yeah, no, don't worry, it's not mandatory type. And then they go oh, actually do you know what? Yeah, no, don't worry, it's not mandatory type thing. And off they go on to the next client. No, it's been absolutely phenomenal. I have loved everything you've said today. I couldn't agree with you anymore.

Speaker 2 30:05

Oh, thanks Matt.

Speaker 1 30:06

You're clearly someone who's very much aligned to the way I think, and it's so refreshing to hear. So, sarah, I can't thank you enough for coming on today. It's been super fantastic. I'm wishing you every success in the future as well.

Speaker 2 30:18

Thanks, Matt.

Speaker 1 30:25

Brilliant. Thank you so much, sarah. That's been fantastic talking to you. That's Sarah Parker from Hollybeck. Everyone. Thanks again, sarah. Now it's time for hashtag AskIPTF. Do you have a burning question? You want to ask me why not become part of the show by sending a WhatsApp voice note to 07442 247 280, and I will do my best to answer all of them. If you don't fancy leaving a voice note, you can always email us on letstalkippodcast at gmailcom, or just comment and post on either LinkedIn X or on our new Instagram account.

Speaker 3 31:01

IP Taskforce UK using that hashtag AskIPTF Right. Who's on the let's Talk IP hotline today? Hi, matt, it's Dylan Smith, one of the seven advisors. What top tip can you offer when a client refuses any protection advice after sorting out their mortgage? I introduce the need for protection at the start of the process and discuss optimism, bias, but still nothing. What last resort approach would you suggest for this type of client? Thanks, matt.

Speaker 1 31:24

That's a superb question, dylan, and probably one that's faced by a lot of mortgage advisors out there listening. Now the first thing I would say is going back to what Sarah said a minute ago in the interview. It's really important that you embed the need for protection into the advice process early on, and I would almost treat them as one and the same thing, so they're not treated as separate issues. That way you can write the protection business alongside the mortgage or even before the mortgage, potentially to avoid the very thing you're talking about. But in the situation you're talking about there, I would probably add a little bit of emphasis and pressure around trying to get it done.

Speaker 1 31:54

So one of the best ways you can do that is by acting assumptively. So maybe send the client a voice note or maybe send the client an email saying now we've sorted the mortgage, we shouldn't have left the protection. I need to get this sorted. I've blocked out. Some time at 3 pm on Tuesday next week. I need to get your application submitted. So can you please confirm your preferred payment date or something along those lines? The more assumptive you do it, the more the client's got to object to what you're saying and come back with a response. But in reality, dylan, the answer to the question is it shouldn't be that in the first place. We need to try and embed protection much earlier on and get that protection advice done alongside the mortgage so the client doesn't see them as two separate things, and that will hopefully overcome all of those objections. Right, who's up next?

Speaker 4 32:33

Hi Matt Andy McKinney here. I've just wondered if you could help other advisors around exclusions on income protection. Recently had a client whose sport would have been excluded from the plan, and then also, obviously we come across health exclusions quite regularly. So how can you help other advisors overcome these issues and sell more income protection plans?

Speaker 1 32:52

Great question, andy, and I'm sure once again, much like Dylan's question, this is something that plagues advisors. Now, the reality of it is important to remember that income protection is a highly comprehensive product in that it covers more illnesses, more conditions than anything else. In fact, it covers anything that stops you working, any illness or any injury that would stop you from being able to work, that incapacitates you and that would enable you to make a claim. So what we need to understand is, even if there are exclusions on the plan, and even if those exclusions are fairly broad, there are still millions of other things that would still be included on the policy even after that exclusion has been introduced. But I think for me the key here is expectation management.

Speaker 1 33:28

The one thing that I always learned when I was an advisor was catching that medical information early on and doing some pre-underwriting activity to get a flavor of what's likely to be excluded or not, and then better managing the client's expectations through that underwriting process. So they're aware that maybe the exclusions, but what that actually means in reality and the fact they still have all those other millions of potential solutions covered. And I think that's what it's down to. If I'm honest with you, andy, it's down to managing client's expectations. We know these things are going to materialise. It's inevitable. Particularly these days, we've got more people seeking support for things like mental health. It's likely you're going to come across clients who have exclusions or limitations on their plans. So just working through with them, letting them know what to expect and managing their expectations is the best way to get those policies on risk, even with those exclusions or limitations, applied.

Speaker 1 34:20

Matt's top tips of the week, right. So today we're going to bash through these pretty quickly and I'll tell you what I thought. The interview with Sarah was brilliant. There is someone who's very much after the same kind of things as I am and behaves in the same kind of way that I do. One thing that she said was bring it up at the beginning and embed it into the advice process, and it's the same kind of things as I am and behaves in the same kind of way that I do. One thing that she said was bring it up at the beginning and embed it into the advice process, and it's the same kind of question that Dylan was asking, which is well, what do you do when you're arranging a mortgage and the client then turns around and says, no, I'm not interested in the protection. So how can we embed it into the advice process?

Speaker 1 34:48

One tip that I want to share with you is about an income stress test. Now, this is one that I used a lot when I was doing mortgage work and when I was trying to get clients engaged with protection early on. When you tell the client what you think they can borrow based on their income, their expenditure and their current situation, you can then talk about this idea of right now we know that and we're using this income to go and get you a mortgage I need to carry out an income stress test just to assess how sustainable the income we're using to get your mortgages. Then say to them how sustainable is it? And they're going to say what do you mean? And you can then explain what you're trying to say is, if we're looking for a mortgage of 360 months, for example, and we can see you've got six months of sick pay, what about the remainder of those months? And then you let them come back and say I don't know, do you get sick pay? You can ask these types of questions and from there you can both determine that actually the very income and deposit that's being used to obtain the mortgage is probably quite vulnerable, and then you can be very clear about the fact that you need to arrange income protection to make sure that the income and the deposit they're using towards getting their mortgage is sustainable. So that's a great way of introducing and embedding it.

Speaker 1 35:48

So another great way is to lean into the value, and we talked this idea about calculating what percentage someone's prepared to spend on their mortgage versus what someone's prepared to spend on their financial resilience and you heard the example we used earlier about that firm I was talking about, where they compared what someone's spending on their mortgage versus what they're spending on protection. So you could try that. In fact, you can go one stage further. This is a great tip for all of you. It's something I've done regularly.

Speaker 1 36:10

When you work out the kind of blue sky scenario you want your client to take for protection, why not calculate what that premium is, a percentage of what they earn each year, and you present it to them that way? And you could go one stage further and say once you know what that percentage is, listen, if I could guarantee your income for the rest of your life, if I could make sure that you always have money in the bank, if I could make sure you could clear the mortgage and all these types of things. And you summarize in sort of aspirational language all the things you're looking to arrange with their protection and say but it means you'd have to take a 2% pay cut in your income. Would you do that Now? Most people would say yes, because if I said to anyone listening today, would you take a 2% pay cut or even a 5% pay cut to guarantee your income for the rest of your life, you'd probably say yes, and it's the same principle. And here's the thing it's like. You know, we were talking a minute ago about this idea that if you buy lottery tickets, why are you buying a lottery ticket? Well, you're buying a lottery ticket because you want to win millions yeah, great, why? Well, it's not for the boat or the car or the Lamborghini. It's really because you want the security that will bring you. Most people play the lottery not because they want the money to buy material things, but because they want the feeling of knowing they don't need to worry about money again. So again, you can lean into that aspirational concept of people and then present it in such a way that it seems highly valuable. Ie, would you guarantee your income for the rest of your life if it meant a 2% pay cut in your earnings? Yeah, of course, I would Well look, I can do that for this much with this. And so it's just relating it back to protection again.

IPTF News and Outro

Speaker 1 37:29

And also, we talked, didn't we, about continuous professional development. I think for me, this is really, really important, and I think Sarah summed it up beautifully this idea that you should continuously develop yourself and learn and expand your knowledge. It goes way beyond the firm that you operate in, and I think there's a danger that we all sit within our silos and echo chambers and it's really important to go outside of that. So one thing I did was seek support and help for a protection buddy. I made friends with someone outside of my organization and I spent time with them talking through the different solutions and things I was looking at doing, and then they did the same with me and I learned a lot from them and they learned lots from me, and it just meant that we weren't sitting inside an echo chamber and we weren't just consuming the kind of knowledge that was already in the organization. It made me a much better advisor. So those would be my top tips, guys. It's all about embedding it into the advice process, embedding value for your clients and investing in your own professional development. Right, and that's everything for this week.

Speaker 1 38:27

If you did enjoy today's episode, please, please, do shout about it. Share the IPTF post, send us a voice on it on whatsapp, or why not just share it around your company, new colleagues, because everything you do helps spread the vital knowledge of IP and what we're trying to achieve with this podcast. As a reminder, please do watch the seven families tenure anniversary film. Links are in the episode description or you can find it on the IPTF youtube channel. It's a very powerful video and one I'd recommend you all take the time to watch. Let's talk IP is produced and edited by Sea Studios. Executive producers are Joe Miller, andrew Wibbley and Vicky Churcher and, as always, I'm Matt Chapman. Empower yourself, empower your clients, and you know what guys? Let's Talk IP.