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Protection pathway

Given the perilous state of the investment markets, many IFAs who considered creating wealth to be at the heart of their businesses have found it necessary to diversify their activities over the last couple of years.

I was speaking to the chief executive of one national IFA who summed matters up eloquently by pointing out: “There are two types of IFA at the moment, those trying to sell what they want and those providing what the client wants. The latter are doing very well. At the moment, they are selling protection, protection and protection.”

In the past, many advisers have been wary of venturing too far into certain forms of protection, particularly critical illness, because of the extent of small print and the potential professional indemnity risk.

Technology frequently gives me the chance to write about good news. In this instance, it comes from a man widely recognised as the industry authority on criticalillness cover, John Joseph.

Over the last year, John has been developing a website at www.healthinsuranceguide.co.uk with the aims of educating consumers about why they need critical-illness cover and the importance of taking independent advice.

The site also provides advisers with the necessary tools to work with clients to document their requirements for protection cover and identify the most appropriate insurers. The site, sponsored by six product providers (Bupa, Canada Life, Liverpool Victoria, Scottish Provident, Skandia and Unum Provident) is divided up into two very different parts.

The consumer-facing area provides considerable educational material about why it is important for clients to take adequate cover. It guides you through the different terminology used for protection products, identifies the broad range of providers offering cover and has a wealth of information about why consumers should buy through an IFA.

My initial reaction when looking at this part of the site was that it is a little too oriented to driving the consumer to IFAs. John Joseph&#39s reaction was that if that was the case, he had achieved exactly what he wanted to.

A “find an IFA” service allows consumers to identify a local adviser with suitable specialist experience to deal with critical illness. Entry to this directory – know as the gold service – is only available to advisers who have been interviewed by John Joseph and satisfied him of the extent of their knowledge in this field.

There is no doubt that the most powerful part of this service is the area reserved for authorised IFAs. Having entered this part of the system, it identifies that you are about to compare 145 products from 50 providers.

The idea is that an adviser will sit down with their client in front of a PC with internet access and go through the relevant questions together.

It is described as a simple five-step process, which, to be fair, it is. However, the richness of the tool is such that an adviser is likely to go through a process of elimination to define what they require.

First, the adviser selects the level of detail they wish to examine – comprehensive or summary. The former is the obvious choice. They then select how many providers&#39 details they want to compare on a single screen, to a maximum of 10.

Options are given to compare across all providers or select from a panel and also to look at all term products, all whole of life, or all of both.

At this point you can select to look at products now but I would not recommend this as it brings up a mass of detail. Select by product name or apply filters. It is this last option that really demonstrates the power of these tools.

Having selected this option you are asked to complete a further nine questions. These are about issues that might affect the provider you select.

At each point, having answered a question, you can apply the filter and see the list of potential providers shrink.

Having selected a provider, you can then bring up full details of their policy conditions. By selecting multiple products and providers, these can each be compared side by side.

At the end of the process, you can decide to store the details collected electronically as a CSV file or print them off for the client to sign.

The service also allows you to generate definitive policy conditions for each contract that can also be handed to the client. In this way, the adviser can demonstrate that the client has selected exactly the cover they want and has been made aware of all policy conditions. Clearly, this is invaluable from both a compliance and professional indemnity perspective.

The standard “silver” access to the health insurance guide service costs advisers only £100 plus VAT per user, those who can demonstrate their experience and qualify for the “gold” service, including listing on the consumer area of the site, pay £500 plus VAT per individual.

Having spent a few hours playing with the service, it strikes me that this is not only an invaluable compliance aid, but also an excellent way of demonstrating to clients both the complexity of the areas you are assisting them with and also the quality of resources an adviser is prepared to invest in to give them the best possible advice.

Whichever way you look at it, this must be excellent value for money and well worth justifying in an adviser&#39s technology budget.

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