Advertorial
Life changes, from little steps to big events
To move with the times the financial services industry needs to adopt a different mindset when selling protection in order to make sure people are financially protected at all life stages
by Ed Stuart- Brown, head of protection sales, Friends Provident
The recession and credit crunch has meant that people are increasingly putting off key life events until later or even for good. It has also had quite an impact on the number of people buying homes compared to those renting. And while most people do still end up buying a house, getting married and starting a family, the time when they choose to do this has changed. To move with the times the financial services industry needs to adopt a different mindset when selling protection in order to make sure people are financially protected at all life stages.
The saying ‘one size fits all’ does not work when we are talking about protection for customers. For example advising a single person with no
dependants to buy life cover is not ‘treating customers fairly’. However, that is not to say that no protection is required for this person. We always talk about income protection being the cornerstone of financial planning and this is a product which should be suitable to every customer. Whichever stage customers are at there is always a need for protection of some kind.
More focus on educAtion There seems to be more focus on education with more and more people going to university. The number increased by 11.6% in 2009 compared to the previous year[1]
. With University Tuition Fees up to £3,290 a year[2] and
the potential for this figure to rise to £9,000 following Lord Browne’s Review, people are even more likely to come out of University with debts before they start work. This could mean having to live with their parents for longer or facing financial worries much earlier on in life. Almost a third of men and a
fifth of women aged between 20 and 34 still live at home with their parents[3]
.
For those young people starting their first job, protection is probably not at the front of their mind. However, this is the time to take out protection because premiums are likely to be at their lowest at this age and when they still have their whole future ahead of them. A financial blip now could change their future direction.
More people renting When people do get the chance to move out of their parents’ home many are choosing to rent instead of getting a mortgage straight away which would have been the norm not so long ago. Since the recession it has become increasingly difficult to get on the housing ladder with the average age of a first time home buyer now at 43![4]
change is quite dramatic especially as just over ten years ago around 54% of first-time buyers were below 25 years old.
The
34 mortgage introducer DECEMBER 2010
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