Holding the Line: Overcoming Cost Objections to Full-Term IP

What do you do when a client says, “That’s too expensive”?
 
In this episode of Let’s Talk IP, Stevie and Matt get into one of the toughest moments in an income protection conversation, when the recommendation meets resistance.

They explore why advisers can be quick to soften recommendations when cost comes up, often not because it’s the right client outcome, but because discomfort creeps into the conversation. More importantly, they unpack how to handle objections calmly, re-anchor the discussion to the client’s goals, and hold the recommendation without sounding pushy or salesy.
 
This isn’t about persuading clients to take more cover. It’s about making sure any compromise is a conscious client decision, not an adviser assumption made too early.

If price objections have ever made you flinch or rethink your recommendation, this episode will help you approach those conversations with more confidence and clarity.
 
Links from this episode:

• Industry Conversations - Episode 1: Misrepresentation - Understanding the Rise and Resetting the Narrative - https://iptf.co.uk/industry-conversations/

📣 For More Education, Collaboration and Insight:

IPTF Website
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Produced and edited by SEA Studios

Transcript

Why “Too Expensive” Happens

SPEAKER_00 0:02

When a client does say that's too expensive, what do you actually do? Think about this for a minute. If a client says something's too expensive, that's symptomatic of a failure to manage their expectations early on. So ignore the goals-based bit for a minute. Just think about expectation management. So early in your conversations, you need to be guiding clients towards realistic levels of investment based on what it is they're trying to achieve.

The Wobble Point For Advisors

SPEAKER_01 0:27

Hello and welcome to Let's Talk Income Protection. Proper conversations and advice for advisors who want to get income protection right, not just get something over the line. In the last episode, we talked about getting to the right recommendation. And this one is about what happens when that recommendation gets challenged. Because this is a moment, isn't it, where things wobble a bit. That's too expensive. Whoa! That's way more than I thought it would be. One of my options to get this cost down. A slightly exaggerated client there. This episode is about handling that properly, not by pushing harder, but by staying aligned to what the client actually said they wanted.

SPEAKER_00 1:14

Yeah, 100%, Stevie. And this is probably the moment for me that has the biggest impact on most advice conversations. And we're going to tackle it from different directions. We're going to tackle it both at the beginning of the conversation and how it led to that point in the first place. And then also when you're in that situation, how can you handle it like a professional? How can you do it without sounding salsy or persuasive, but do it in a way where, yes, we maintain that professional standard and we actually help the client conclude what it is they really need from the conversation or the advice that we're giving them so that we do it and that they feel potentially part of the decision-making process, but without that we're pitching something hard to them? Because I think this is probably the moment where a lot of advisors do end up defaulting to short-term. Not because they don't see the value in the full-term plan, not because they ever wanted to default to a short-term plan, but because naturally what happens is the minute they get challenged, their confidence crumbles, they don't want to pee the client off, and they're so concerned about ensuring the client gets some level of protection. So they're doing it for all the right reasons. And for all intents and purposes, they're doing it from a very solid place where they actually care about the client outcomes. But this is where we can teach them today, in this episode, it's going to be brilliant how to not let that happen and how to maintain the recommendation you wanted to start with at the outset.

How Discounting Undermines Trust

SPEAKER_01 2:23

Amazing. Matt, let's get straight into it then. Um, why is the price conversation the moment where most advisors struggle?

SPEAKER_00 2:31

Well, because when it becomes a price conversation, it's a sales pitch, right? That's the whole point. Most advisors, I believe, listening to this, do not want to be sellers. I don't think any advisor wants to believe that they're a seller. And the clue's in the name, advisor, right? We all want to be advisors, we want advice. So this session's about giving advice to our awesome advisors so they can go and be awesome and actually give advice. So the beautiful thing here is just teaching them to understand that if it becomes a price-led conversation, if it becomes a commoditized conversation, if it becomes about cost, you've probably already lost the battle a little bit. Most of these issues come because there's not been enough expectation management early on in the conversation, right? There's not been any kind of emotional anchor. I've not kind of given you a realistic level of investment that you ought to be thinking about. And I've not probably managed your expectations that well. So that when I present that recommendation to you, there's this knee-jerk recoil where you kind of go, oh my God, that's way more than I was thinking of spending. And in that moment, I can react one of two ways. I can either hold my professional line and I can talk to you about why it's so crucial, why it's such a valuable investment, or I can cave and give in to the pressure you're giving me and ultimately compromise your level of financial resilience because it starts to get a bit uncomfortable.

SPEAKER_01 3:42

Uh I really like that awesome advisors there. We might have to start calling our listener that. Um so what tends to go wrong then when advisors who are maybe not so awesome immediately reduce that recommendation then?

SPEAKER_00 3:57

So this happens because the advisor starts to feel uncomfortable, right? They don't like being challenged. And it's because let's say, for example, you're a mortgage advisor and you've given advice around the mortgage, you do not expect to be challenged around the mortgage advice. So when they give this presentation or this recommendation for a full-term plan, for example, and the client pushes back, it's a space they're not familiar with. And so what happens is they recognize that there's this little bit of discomfort. They're fearful that they're gonna damage the rapport they've built with the client. And so the immediate response is, well, let me just try and find something the client's gonna accept. Um and so because the client raised a price-based objection, the advisor thinks the solution is a price-based solution, which means let me find a cheap alternative for you. But the ironic thing about that, Stevie, the most ironic thing about that is in doing so, the advisor who is so desperate to not sound like they're being a salesperson, has just indicated that they have a sales lib motive. Because when I turn around to you and go, okay, well, in that case, uh, let's look at a cheap option. And I've abandoned the core advice I was giving you, which is this need for ongoing income. Suddenly, I'm indicating that my real goal here is to sell you something. Yeah, so we're haggling a broadband contract now. Absolutely. Whereas actually, either I've got the conviction in the fact that you need the income, we've agreed that's a goal that you want to protect or not, or you don't. And I think that's the key thing I'm trying to get across advisors in this episode, which is actually the minute you start making about price, the minute you start defaulting to cheaper alternatives, you're actually only undermining yourself. You're actually creating a situation where the client is very much going to feel like they're being sold to by you. So it's best to avoid it and actually maintain that line because either they need it or they don't, but it's about how you do that. And that's what I want to coach you guys through today.

SPEAKER_01 5:34

Yeah, so let's let's talk through that because um, you know, as we've been always saying in this in this season, uh, quite often it's one of the first things we need to be doing is is finding out the client's goals and anchoring the whole conversation around that before you really start anything. So the idea is that you you should you start with that before we move on to the recommendation. But I guess this is the ideal world. That's where you know maybe we want to be in the future. Maybe we're not quite doing that

Set Expectations Before You Quote

SPEAKER_01 6:06

now. So when a client does say that's too expensive, what do you actually do?

SPEAKER_00 6:13

Think about this for a minute. If a client says something's too expensive, that's symptomatic of a failure to manage their expectations early on. So ignore the goals-based bit for a minute, just think about expectation management. So, early in your conversations, you need to be guiding clients towards realistic levels of investment based on what it is they're trying to achieve, which of course you can only do if you've understood their goals, right? But that's a whole separate conversation. And as you rightly said, there's something that we're trying to emphasize very clearly on this series, which is when you make it clear with a client what their goals are, if you agree those goals, and it's what I coach. My entire three-step coaching framework that I've patented is essentially agree the goals, manage the expectations, and then set rules of engagement because that's how those down awesome advises.

SPEAKER_01 6:50

That's that's uh some free pro tips from Matt there.

SPEAKER_00 6:53

But that's how you build the structure around a repeatable framework that you can bring into every advice conversation, which is agree the goal with the client, manage their expectations about what's gonna happen, what they need to potentially invest to achieve that same objective. And but at this point, it's an agreed goal, right? They've agreed a goal with you, so it's like a mutually agreed goal. And now it's a case of you as the advisor, we're gonna walk them through what the advice process looks like to get to that point. So, okay, so I'm gonna be looking at you know an income stress test. I'm gonna identify if there's any gaps in your income that would stop you from being able to achieve that goal. We'll look at what key solutions you're gonna need. And so what I'm doing is setting your expectations, saying, yeah, and realistically, you probably need to make sure you put aside, you know, between sort of two and three percent of your income towards having a solution that's gonna safeguard your income so you can achieve it. So just understand that's kind of probably what you're gonna be looking at. Then we move into does that sound like a plan of action? And you're gonna say yes, and then we move into conversation. What we've done there very carefully is we've set the framework early on as to what the client can expect from the conversation, which means it is likely to reduce or at least eliminate some of these kind of future price-based concerns because in your mind you're naturally benchmarking and earmarking an amount that you're gonna invest in something, right? So then the conversation later becomes much easier. But let's assume you haven't done that, as you rightly say.

Pass The Ball Back With Questions

SPEAKER_00 8:06

Let's assume you haven't. Let's assume the client pushes back on costs. Now, the natural assumption for many advisors is to straight quickly default, ski downhill like you're going on a black run, to get to a point where you go, okay, well, listen, how does um we've got this cheaper alternative over here, which means I'm undermining myself and I'm offering a cheaper alternative. Well, cheaper, we all know cheaper doesn't mean better. So I'm then presenting a quote to you that's a cheap premium, thinking that you might take that because you've just raised an objection around price. What I should be doing in this moment is actually turning around and passing the ball back to you, which is, no, I understand that's more than you were hoping to invest in in these solutions and in safeguarding your goals. But actually, what we need to do then is work off something that you can agree is a minimum benchmark or, you know, a non-negotiable. So why don't you tell me what's the minimum level of income you need every single month to maintain a lifestyle that you're going to be happy with? So I've tried to base this on what I think would be the maximum output you could get, you know, the best outcome you could possibly get. But I recognize that's me trying to convince you that that's what you need, but you might not feel that's the case. So why don't you tell me what's the minimum you need each month to maintain a lifestyle you're happy with? So what I'm really doing here is trying to invite you into the dialogue. I'm trying to invite you into the decision-making process. But what I'm doing is I'm asking you a very finite question that makes you think you've got to give me a response so that we can start moving on to the next process. What I'm not doing is going, oh, oh, okay, well, we have cheaper options over here and undermining everything I've said because what I've just done, if I do that, is just completely disregard any advice I'm giving you and make it look like I'm trying to sell to you. So instead, I've got to hold the line, which actually creates a bond and a respect between us because I'm still giving you advice. And I say to you, okay, Stevie, I understand that. I recognize that's probably more than you were hoping to have to invest in your own financial residence. So walk me through what's the minimum level of income you feel you need every month to maintain a lifestyle that you would be happy with, and what we'll do is we'll work off that instead and we'll adjust the options. And then you're going to come back with a figure. The minute you give me that figure, I've then got something else to work with. So then I can might say, another way in which we could potentially reduce the amount you need to invest. Now, by the way, I'm saying not make it cheaper, not reduce the premium, reduce the amount you need to invest in these essential solutions would be to potentially delay how quickly you'd need it to kick in. So, for example, are you prepared to wait a little bit longer for the benefit? Do you think you'd be financially able to cope? And I'm starting to put the ball back onto you. I'm asking you questions for you to determine what's an acceptable level of compromise or what's an acceptable level of risk that you're prepared to take on because otherwise I'm making those decisions for you too quickly. And I'm defaulting to a short term or I'm defaulting to an age costed. And it's not to say those products don't have merit or value. I'm not saying that. What I'm saying is the danger is when I start making those decisions for you without asking questions around the outcomes that you're wanting to safeguard. Does that make sense?

SPEAKER_01 10:54

Yeah, 100%. And it's just making me think from the client's perspective, especially one that may not be before these conversations, probably

Make Income Value Real And Tangible

SPEAKER_01 11:04

wasn't aware of income protection, probably probably wasn't aware of these incredible products that are there. And that's you know, that's something that we you know we want to change in the industry. But what it may feel like is another cost in a time where there is cost upon cost upon cost. And I might not necessarily want to stop my pet insurance for my beloved pet. I might not want to stop my sky or my or reduce my broadband down to something to do to do this at this current moment, or even though even though it's needed.

SPEAKER_00 11:39

Yeah, but this is a really important point because a good advisor would turn around and challenge you on that and say to you, but you can't pay for your pet insurance and you can't do any of those things if you don't have the income coming in. So this is not this is not about me convincing you to do something, but it's actually about recognizing and listening to the things that you say you value, and then me explaining the relationship between ongoing income and your ability to even do those things. You can't feed your pet, you can't pay the pet insurance, you can't do anything if you don't have the income coming in. So all of a sudden, it's about how do I create that value early on in the conversation so price stops being an issue and it becomes a secondary consideration. And what you're saying is absolutely right, Stevie. You know, you're touching on a beautiful point, which is we're almost assuming that the client comes into the conversation and is aware of these things. So all I would say as a top tip to advisors listening is spend a bit of time early on in your conversation explaining the value of income. Last week we talked about the Jenga video, you know, the IPTF. Another great example of how you can create that explanation before you get into it. But I often used to do these things with clients where I talk about their reliance on income and saying, look, this is probably one of the most crucial and important financial conversations you will ever have in your life. Because many people have probably never took the time to explain to you your reliance on your income, how important it is to you, and how essential it is that it carries on. So you could use examples like the five basic necessities for survival: air, food, water, heat, and shelter. One of them being free. Ergo, you need income every single month just to survive in this commoditized world. Or, for example, look, this isn't about um an expense or a cost. This is about recognizing that at the minute, the cost to you is already you're giving up somewhere in the region of a third of your life. A third of your life, hours, precious, minutes, months, the time on this planet that you could be doing other things in the pursuit of income. That's how crucial and important income is to you and your lifestyle. So, what this is about is understanding how we can safeguard and ring fence that in a cost-effective way. One of the best examples of this I ever did was when I sat in front of an audience of people and I said, look, let me just kind of provide some context for you guys. If I said to all of you, I could safeguard your future, I could safeguard your financial situation, I could make sure you've always got enough to pay your mortgage, I could make sure that you've got enough to retire on when you need to. Essentially, I can make it so that you very, very rarely need to worry about money again in your life. How does that sound? And they were like, oh my God, yes, please. And I said, Yeah, but the only way I can do that is if you accept that you're gonna have to take a 5% pay cut. Would you do it? Now, most people go, yeah, no brainer, right? Because contextually, 5% of your income is nothing to ensure that you've got complete financial security and resilience. But that's exactly what we're doing when we set up financial protection like this. It's like income protection provides that level of financial security that we've just talked about because it enables you to have an income for the rest of your life and continue to make pension contributions and continue to support the lifestyle that you want to build for yourself, to pay your mortgage, to invest in property, to whatever it is you want to do. But yet we don't look at it context like that. We look at it, oh, it's a price, it's a pounds and pence figure. But 5% of someone's income, it'll be rare that an advisor runs a quote and it ever gets close to someone's income at 5%. So this is about value perception. So the point I'm trying to make is the two ways you deal with this particular challenge are if you get to the point where the customers have challenged you, you've got to remember early on in the conversation you were missing some fundamental parts. You missed the educational bit around the value of income and how much they actually value their income. Imagine someone asking you the question, Stevie. Okay, put a pound and pence figure on the value of your income. Tell me today, your income, what you get, how much is that worth you in pounds and pence? I'm not gonna ask you to do it, don't worry.

SPEAKER_01 15:09

But the point I was at a loss.

SPEAKER_00 15:12

Because it'll be way more than any premium I ever ask you to pay. But I haven't done the contextual work as an advisor to make you see the value of it, right? So, this is all the clever stuff that advisors can be doing early on in their conversations. Agreeing the customers' goals, educating them and managing their expectations. What do you really realistically need to set aside to make sure you can achieve these goals and continuously have income that you're so willingly going to give a third of your life up for? And then you agree that's how you're gonna move forward. That way, when you get to this point and you present a full-term plan, it's going to seem like great value because they've already earmarked a significantly higher figure, or they understand the value behind the recommendation you're making. Then, if and when, if and when they do push back the way we've just talked about, you don't cave, you don't abandon it, you start making them responsible for the compromises they're going to make because you've made it clear what it is you're trying to achieve together. That is the foundation and the structure of a really good advice conversation that is not salesy, it's not persuasive, it's value-led, and it's about what matters to you as a client. And if I do it this way, these objections, these rejections, these resistance that you're going to experience become very easy to tackle because we've done the groundwork to anchor the value. Sorry, I went on a proper little ramble then, didn't I?

SPEAKER_01 16:31

I loved it. Thank you. Yeah. The passion. Yeah, that's what we need. And I think it sort of highlight it highlights how, yeah, it it is this advisor role and this sort of educational role, and it feels like you know, a support, you know, is sort of I'm I'm trying to help you, uh trying to help my clients be better protected. So if the worst happens, you are your your income is protected. Uh, but also I have now provided you with some essential financial knowledge that is you know severely lacking in in education throughout uh throughout the UK. Um let's throw in a slightly more advanced objection with with

Higher Risk Quotes And Disclosure

SPEAKER_01 17:12

costs. Uh and please excuse me if I if I don't fully understand the environment here and how things work. But I was just thinking about people who, you know, maybe you know, slightly overweight, even though you know we know the BMA, BMI scale is slightly outdated, needs to be updated. We've got, you know, maybe someone who is a smoker, or maybe a vapor, or someone who's you know trying to quit, or maybe someone with a you know a much bigger sort of exclusion or you know, or on the edge, you know, when those clients are slightly difficult. How do you deal with that then? You know, obviously there is you need to be able to get that information up front, and that's you know, you are reliant on the client, client, you know, providing clear uh and honest information. But what happens then when there is a you know the price is you know, it's higher than you maybe yourself expected, but you are still covering the needs as you as you as as they want.

SPEAKER_00 18:07

Good point, very good question. I think actually any advisor worth their salt is going to be asking those upfront questions in order to be able to actively manage the client's expectations early on. Again, I'm sorry to tell you, it just goes back to this whole psychological point of it's an expectation management exercise. It's like uh and don't get me wrong, I recognize that when you get to those situations where there are significant risk factors or there are things that have um a very detrimental impact on the potential level of investment the client needs to make, it can make the conversation that little bit more uncomfortable. However, well-managed expectations, and I think for me, when you have this situation where a client is potentially pushing back on this, it's important to recognize that the reason the premium has gone up is because their level of risk has increased. It's not just because the provider plans on charging them more, it's actually that their likelihood, the propensity to need to make a claim has increased. So there's two things here. One is understanding that risk level, that risk profile, and actually managing the client's expectations around well, actually, this is just symptomatic of the fact that you have a higher likelihood of needing to claim in this plan, which means probably you really need to be thinking about this full-term coverage, right? So it's about education, but it's also to do with to do disclosure, right? And I think it's really important that misrepresentation is handled early on because you should there, you know, you're relying on the client to be honest. You know, there's a lot of work the IPTF are doing in this space at the minute around misrepresentation and you know, claims not being paid because you know, advisors have for whatever reason not been able to extract that information. So there's a series of questions you can ask the client very early on in your conversations, which will just give you a bit of um a bit of a guide as to whether that needs exploring further so that you can start managing the client's expectations through the advice process, ideally before you even start offering quotes, Stevie. And then that way you don't have this problem. But going back to your original question, I'm sorry, I've kind of gone a bit roundabout there, but it's just trying to provide guidance where we can to our wonderful advisors. Um, I think a lot of this is around advisors recognizing that in that situation, it may only be the option that you start having to look at shorter-term plans to make sure the client's got at least some form of income, that you explore an age-costed option. But like we talked about last week, you make the client very aware of what the compromises and risks of taking on a plan like that might look like. But it's really just about, like I said, managing clients' expectations so that nothing seems like a shock. Because if it seems like a shock to you as the advisor, or if it seems a shock to the client, somebody somewhere has failed to manage their expectations, right? Whether that's your expectations or their expectations. So I think this is really just an educational exercise for the advisors to think if this is happening to me quite a lot, what can I do early on in my conversations to better understand these risks, manage my own and the client's expectations better so that when we do get to that point, I'm prepared and able to control the conversation without panicking.

SPEAKER_01 20:55

Well, there you go. Awesome and now wonderful advisors. There you have it. We sp we touched on misrepresentation there a little bit. And actually, back in March, uh the IPTF release uh the industry conversations. This is the first of a series of four. Uh, this time it focused on misrepresentation, uh, featuring seven industry voices across the protection space. Do go check it out, which you can find over on their YouTube channel, youtube.com forward slash at the IPTF to watch that. Now, Matt, let's start wrapping things up now. So, what's one simple shift our awesome advisors can make straight away to improve their advice when they are facing that price objections?

Stay Calm And Keep Professional Line

SPEAKER_01 21:46

I'm sure I'm gonna hear the same thing I've been hearing all episode.

SPEAKER_00 21:50

Do you know? I'm not actually gonna touch on managing expectations because I think I've made that pretty clear from the conversations we've had today. So instead, what I'll do is I'll give advice about what to do when you're actually facing a price based advantage. Objection. I think the first thing to do is not panic. Don't panic. Don't undermine what it is you're doing. It's really important that if the client pushes back on investment, acknowledge what they've said to you. A bit like I showed you when we do that little role play, and it's kind of, I understand, I recognize that's probably more than you'd hoped to invest in these essential plans that we're talking about. However, we know you need the income, so instead, let's look at what we need to do to make this work for you. So can you tell me what the minimum level of income you need each month is, for example? So what you're doing is you're acknowledging what they've said, you're recognizing where they're coming from. But what you do is you come back with a question that puts the ball firmly back in their hands and makes them accountable for the choices they're about to make.

SPEAKER_01 22:40

Okay, Matt, I'll try and conclude everything up now. So uh let's see if I've got this straight. This isn't about getting better at selling or better at your advice, it's about sticking to the right advice, the right recommendation. And if it changes, that will cut that has to come from the client and their wants and needs changing. So it's not backing off too early.

SPEAKER_00 23:08

Is that right? That sounds spot on, Steve. It's about not necessarily holding the line or selling or pitching anything, but actually making clients accountable for the choices and the risks that they take rather than us imposing that onto the clients because of our fear of dealing with price-based objections. So for me, what this is about is it requires a mindset shift from advisors, which is just because a client's pushing back on cost doesn't mean they haven't accepted the need the income. It doesn't mean they're not happy with what you're recommending. It just means we haven't yet found that acceptable level of compromise between cost and risk for them. So for me, this is about not abandoning your recommendation because if you want to avoid sounding like a salesperson, the worst thing you could do is actually abandon your recommendation and make it about price. So instead, hold the line, stay calm, retain that professionalism and go back to the clients that they make those compromises, that they make those choices, they make those changes to the recommendation and they accept the risks they're about to take on because they want to make that short-term saving and the premiums they're paying.

IPTF Updates And Listener Requests

SPEAKER_01 24:03

Thanks, Matt. And that leads nicely into the next episode because if we haven't properly defined what they're aiming for in the first place, there's nothing to anchor any of this to. So do join us next month for that. In other IPTF news, some exciting news incoming in June for the IPTF. Look out for the second industry conversation video all about wellness and value added services.

SPEAKER_00 24:29

Oh, and register now for Rosalia Lazaria's second online advisor workshop on social media growth and lead generation, which is happening on the 2nd of July over at iptf.co.uk.

SPEAKER_01 24:40

Amazing. And finally, if you found this useful, a quick follow or review wherever you listen really helps, or even better, share it with your advisor colleagues and friends. All right, that's it from us. Catch you next time. Thanks for listening.