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Idea ideals

Getting a bad reaction to an idea does not always mean that the idea is not good.

One of the first entrepreneurs to go on the Dragons’ Den TV programme asked for £75,000 to manufacture and promote a new board game. She was denied an investment by all the experts, who agreed that the market for board games was over-run and impossible to crack.

The game has since become a best seller, making its inventor a tidy fortune and earning her the accolade of Business Woman of the Year.

I was reminded of this at a recent meeting with a group of mortgage brokers to discuss protection in general and what strategies could be used to drive up income in these testing times.

One of the brokers shared his plan which was to contact all his previous clients and try to sell them unemployment cover. He had realised that economic conditions meant that redundancy figures were rising. With the public becoming increasingly concerned about unemployment, they might be receptive to his suggestion.

The reaction to this idea from some of his peers could not have been more vitriolic had he said that he actually found leaving prank messages on septuagenarians’ answering machines quite funny. Many thought that this was cold-calling and tantamount to preying on people’s insecurities to exploit a sales angle.

The only thing that surprised me was that no one else had thought of doing this. Aren’t we, as advisers, supposed to keep in contact with our existing customers to ensure our advice is up to date?

As protection sellers, is it not our duty to advise our clients of insurance products which could mitigate the effects of a drop in their income?

This isn’t cold-calling as I know it (someone ringing me halfway through Top Gear to ask how my guttering is holding up). This is my financial adviser letting me know that if I am worried about losing my job, he has got a product which might be helpful. This is a pretty good opener to a full protection review, from which I would not begrudge him earning commission.

Part of the problem might be the industry view of the accident, sickness and unemployment product of late. Many have criticised it and there is little doubt that it has been widely missold. However, as part of a full advice package and correctly compared with or, better still, sold in addition to full income protection, there remains a definite place for ASU.

For income protection as a whole, the time is ripe for the often predicted increase in sales to come to fruition. The Government’s welfare reforms have slipped quietly under the radar due to the banking crisis but a good adviser should no doubt be using the new employment and support allowance as reason for their clients to be thinking about income protection.

It would also be interesting to see how consumers would react to buying income protection directly, should a system be produced which made it as simple to compare and buy as critical-illness cover.

Incidentally, sometimes ideas get a negative reaction which is fully warranted. Just ask the inventor who wanted the Dragons to invest in her cardboard beach furniture concept. Wet kids plus cardboard equals…?

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