This younger generation of buyers have already shown themselves to be tech-savvy and research-led, with recent research from LV revealing that more than 8 million 22-44 year-olds have considered income protection in the last 3 months.
As the understanding of the value of protection grows in response to the coronavirus pandemic, 40% of 25-44 year-olds with no life cover are now considering life insurance, with an increase in demand for fair, transparent advice.
It’s vital that mortgage advisers are prepared to discuss all options available to younger buyers, and are clued up on the interconnected nature of protection insurance and mortgages.
Keeping in step with your clients
It’s likely your millennial client would’ve done their research when it comes to finding the right mortgage, either using price comparison websites or online advice platforms to suss out some of the best deals before speaking to an adviser in person.
Millennial buyers are gravitating towards protection policies as a way to safeguard their financial future, so it’s imperative to understand the variety of policies available and which might satisfy their specific needs in order to win trust.
The protection gap and younger buyers
There is a strange phenomenon happening within the industry at the moment - we are dwelling on a protection gap, yet, nothing is really changing to address it. In part, this protection gap exists due to an advice gap – some younger buyers simply don’t know what they need or don’t know where to find it, when it comes to entering the mortgage market.
Currently, many mortgage advisers shy away from selling protection for a number of reasons including a lack of confidence and knowledge, the compliance overheads plus clunky processes and systems.
In addition to this, younger buyers are moving away from a one-size-fits-all type of financial service provider, by incorporating a variety of different tools and services for their everyday banking needs - such as challenger banks, money apps, online retailers and investment platforms. It can be increasingly hard for advisers to factor in every option available to young buyers and understand how each option interconnects with or impacts other services.
Proprietary technologies such as Anorak’s platform instantly factor in these complicated and often disjointed variables, to understand how different services interconnect, helping to streamline the research process for mortgage brokers.
If we want Generation Rent to become Generation Buy, we also want them to become Generation Protected - with our research revealing that currently, 50% of all UK mortgages have no protection insurance backing them in at all.
Using technology to put power in the hands of your client
Technology can give brokers the upper hand by considering each client’s circumstances and streamlining the research element to finding the right policy options, equipping your clients with the information they need and empowering them to make the right financial decisions for them.
Technology should be seen as a viable way to help brokers navigate this time of immense change for the sector and economic uncertainty for us all, by supporting brokers efficiently and compliantly to help protect their client’s best interests.
Protecting your clients future
There is no doubt that as a broker, your priority will be to help your clients find the best solutions for them including factoring in the long-term implications of mortgage commitments and the solutions which might help mitigate these risks.
It’s strongly felt by leaders within the industry, and by millennials themselves, that protection cover is a vital element of this guidance in the current climate.
As a result, if you don’t feel the protection sales are part of the proposition you want to offer to your clients, it’s important that the risks associated with this are made clear as the last thing you want to do is to leave them exposed to unforeseen financial risk. We recommend referring them to a partner who does offer protection advice services known as the “Signposting Option” to better prepare your clients for a bright financial future.
As a greater variety of financial services become widely used by millennial customers (and across other age groups) technology that collates and organises the vast swathes of options out there, should help advisers keep step with their clients. As more buyers enter the mortgage market, whilst the country pulls out of a global pandemic and enters a new recession, it’s vital that advisers guide clients toward protection options, to better financially safeguard their homes, for themselves and their families.
