View more on these topics

Is selling really such a dirty word?

Chadborn, Peter_700x450

The old adage that protection is sold and not bought has proven to be quite divisive during a number of recent online and offline discussions.

Some people think it harks back to the dark old days of the insurance salesperson – the tied agent flogging expensive policies to a blindly loyal customer base – and that we have progressed to become a more transparent professional industry these days, which we have. And that we are advisers not salespeople.

Others say that the “sold, not bought” maxim is as true today as it ever was. The notion of selling can be interpreted as encouraging someone to acquire what they really know they need but perhaps have not got round to doing, or the extreme of coercing someone into buying what they do not actually want or need.

Selling in terms of protection must surely be along the lines of the former definition, so should it really be seen as a dirty word? You will not find many advisers who say that most of their clients or prospective clients get in contact to request a review of their life cover or income protection. In the vast majority of cases a nudge is definitely needed.

One of my first protection policies sold as an IFA was a life and critical illness policy with Standard Life covering a client’s interest-only mortgage. It was acquired after a nudge from me. My client had a family and a sizeable debt; knew he needed to take out some sort of insurance and needed a steer on the type and structure of the cover and the provider. That was 14 years ago and the policy recently expired. Was the policy sold or bought? Typically, I would consider the concept of protection needing to be sold but the rest of the process being advised.

I often remark to clients I hope the premiums on their protection policies are a waste of money. This is, of course, a precursor to a discussion about peace of mind and a sense of responsibility. In this instance my client should be delighted that he and his wife have not needed to claim on their life and CI policy during the last 14 years. However, this emphasises the difference in selling/advising protection compared with other areas of advice. We are encouraging people to commit money towards something that they hope they will never need and that challenge should not be underestimated. What price peace of mind?

Fourteen years on and for a variety of reasons my client in question still has a fair-sized mortgage. He clearly understood the peace of mind and responsibility theory because he was keen to put replacement cover in place, which we have done. Along with Standard Life no longer being active in the UK protection market, there are far too many other changes to mention which have taken place over the last 14 years. The key changes, however, are that I have arranged two individually owned polices as opposed to a single joint life policy; the case was outsourced for full telephone underwriting (via LifeQuote) and I proudly did not recommend the lowest premium.

The term of the new cover was set to run for 10 years to coincide with my client’s planned retirement so apart from hoping they clear their mortgage debt by then, I hope this sold insurance will also prove to be a complete waste of money.

                              Peter Chadborn is director and adviser at Plan Money

Recommended

Legal-and-General-LG-700.png

Advisers wary on L&G direct protection service

Advisers say a new protection comparison website run by Legal & General runs the risk of encouraging consumers to buy on price without advice. Comparecover sells life insurance directly to consumers from insurers including Zurich, Aviva, L&G and Beagle Street. The website gets a commission for every policy sold, which is then shared with the […]

Ian-McKenna-in-2013-700.jpg
3

Ian McKenna: How to fix the broken protection industry

At last month’s Protection Review conference, chief executive Kevin Carr identified just 3 per cent of mortgage advisers think the protection industry is working well for them. This is a damning indictment of the current state of the life assurance industry. A small number of highly professional specialist protection advisers, who understand their products inside […]

Tom Baigrie: Investing in the market of the future

The default position of protection commentators is the market is in need of reform, and is perhaps even broken. But I now see our collective business as making decent progress overall. For a while now my firm’s internal data has been showing quite clearly our customers are becoming more receptive to the product that will […]

The Brunner Investment Trust – April 2017

Welcome to the latest update for The Brunner Investment Trust PLC from the Trust’s portfolio manager, Lucy Macdonald. Market Review Global equities have rallied over the first quarter of 2017, buoyed by signs of strengthening growth and optimism over company earnings, although this rally has faded towards the quarter end. US equities posted their strongest […]

Why your clients need some tough love

In any relationship that matters, professional or personal, you should be upfront with someone if you think they’re making a decision or doing something they might later regret. Being honest with someone and having their best interests at heart, however hard the message, is key to building trust in any relationship. So how does this […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 12 comments at the moment, we would love to hear your opinion too.

  1. Personally I could not agree more with this article. Selling in my view is only bad if the product is not needed. If its needed then nudging the person to see / understand the need cant be a bad thing any more than coercing a friend to see their GP if they find a lump, where you are effectively selling the concept and importance of seeing the GP.

  2. “Is selling really such a dirty word”?

    Only to those unwilling to look honestly into a mirror

    After all there is no business without a sale (whatever that may be) and it applies to many more facets of business and life than just our little world.

  3. The answer to the headline question, in one word – YES.

    We are supposed to advise. Selling depends on a product being purchased and is therefore transactional. I thought we had moved on from there.

    Advice is what we ‘sell’. That is paid for whether or not a product is purchased. That also happens to be a better business model and you are a lot less likely to receive a complaint for a mis-sold product down the line. I never bought in to the idea that those who buy subsidise those who don’t. I wouldn’t like to be treated that way.

    It is also a matter of having the ‘right’ clients. If you need to ‘nudge’ them then I would say that you are fishing in the wrong lake. Lay out the alternatives and explain (in writing). If the client doesn’t wish to proceed that’s their lookout. The bill is presented anyway. If they do purchase you will often find that the fee is a darn sight cheaper than the commission paid on a life assurance product.

    Yet again I reiterate; we are not social workers it is not our task in life to cajole people into doing what is good for them. They should have the basic modicum of intelligence to work that out for themselves.

    In fact on a personal level I absolutely hate ‘being sold to’. Even when I was in industry ‘selling’ was not to the forefront. We just produced products that people wanted and we didn’t really have to twist arms.

  4. If you are selling a ‘concept’ i.e. peace of mind and a need to protect oneself from unforeseen circumstances, then what is wrong with describing it as such. This usually has be done prior to giving the client ‘advice’ on the best way to achieve this.

    Whilst Harry may hate ‘being sold to’, I can only think of a handful of instances where clients walked into offices and ‘asked to buy’ protection contracts.

    I don’t think these concepts have changed very much in the 30 years I have been in Financial Services? We can dress us what we do in different language, but those that do a good job for their clients are still doing a good job, however you wish to describe allowing a client to understand a concept!

  5. Harry you have your view but it seems your definition is always a definition of bad selling. a good doctor is not someone who tells someone what is wrong with them and then simply explains the range of options. a good doctor works with his patients and guides them to a position of informed choice and works to combine his expertise and knowledge of their condition with their preferences so that the right choice is made by the patient. good consultative selling involves clients understanding their choices and then being inspired not cajoled to make the right choice for them and then acting on it. quite frankly if all you do is charge people for advice which they don’t take your advice is a waste of their money.

  6. Of course we sell, and IMHO its not a dirty word, I can never understand why people get so “prissy” about it.

    I have walked out of a client meeting many a time, without transacting in a product and still charge, most of the time clients do act on the advice and recommendation I have presented, written or oral ! either way I have sold, sold myself, sold my concepts, sold my service for the future, and yes sold a solution / investment or product.

    At the end of the day one party is paying and bought something and one party is earning and sold something that transaction is a sale ! end of story.

  7. Yes its a word that should have died with RDR. Advisers don’t sell they advise. If consumers think about being sold to they think of being pushed into a decision for the benefit of the seller. Advisers don’t represent third party providers so they don’t sell their products. Ask yourself if solicitors or lawyers ‘sell’ – surely they provide a service – just as a professional adviser should do.

  8. no Harry it isn’t.

  9. And brush up my typing!

Leave a comment