Alisa Wallington, Senior Product Manager, Ipipeline Uk
Decision making has never really been my strong point, but thanks to COVID-19 my life has become a frenzy of one guilt-ridden decision after the other.
Days are nonstop chaos, but when the laptop closes and the kids go to bed the mood eases and my partner and I are left with an abundance of…time.
Time to start sorting out some of the things we’ve been putting off, like catching up with old friends, tidying the garden and throwing out old clothes. For many people this is also a good opportunity to start paying more attention to their finances.
COVID-19 has severely impacted the mortgage market, with half a million home sales set to be ‘lost’ in 2020 from the fallout of the pandemic. The number of mortgage products has halved, and several lenders have stopped lending altogether.
Conversely, there are positive signs in the remortgage market. Online searches for the word remortgage were up 60 per cent in March compared to the monthly average, according to analysis of search terms by mortgage broker Private Finance. The record drop in the Bank of England base rate to 0.1% triggered mass mailings from banks to customers currently on the standard variable rate (SVR). This will have inevitably prompted many to search for a new deal in a bid to reduce their monthly outgoings. Broker firms have also reported increased enquiries on remortgaging, product transfers and further advances as people look at ways to improve their financial position.
This surge in remortgages and product transfers provides the perfect opener for the protection conversation. There has never been a better time for brokers to demonstrate their value, so it is vital that advice covering the full suite of protection products is offered. Life, critical illness and income protection should all be discussed, with an explanation of their relative importance and the chances of worst-case scenarios occurring alongside the potential impact if they do. Risk reports can be used where available to help support and personalise these conversations. It is also critical to identify any gaps in coverage, particularly if the client’s circumstances have changed.
Additionally, there is an increased focus from the industry on the quality of protection products. Most providers now offer a range of ancillary services such as access to virtual GPs, counselling services and children’s cover alongside standard cover. These services are extremely relevant in the current climate and should be used to help strengthen recommendations.
In the words of almost every politician out there, we are facing unprecedented times. Let’s use this opportunity to have as many protection conversations as we can and help people achieve the financial resilience they are so desperately seeking.