Pandemic drives financial advice for income protection and critical illness up by a third

Nearly a third (29%) of advisers involved in the research reported more demand for their services with a majority (67%) saying this was for mortgage advice, followed by that for income protection (39%) and critical Illness cover (36%). While demand for services including retirement planning and wealth management had both fallen for 38% and 34% advisers respectively.

The findings reflect figures published by the Bank of England which show UK mortgage levels as being at their highest in 13 years. This market has been boosted by the stamp duty holiday which is currently due to end in March alongside people reassessing their housing needs after spending much of 2020 at home.

As well as being stimulated by mortgage activity, it seems demand for protection is being brought into focus with people wanting to put financial safety nets in place for themselves and their families amidst health concerns and economic uncertainty.

When asked about their relationships with customers, nearly a third (32%) of advisers agreed that these had strengthened through the pandemic though more than half (52%) disagreed with this statement. This may suggest that general disruption and widespread changes to policies is impacting on service levels alongside the inability to meet clients face to face. However, relationships with providers were seen to have improved for most (75%) advisers.

Louise Colley, Zurich’s UK Director of Retail Protection added; “We’ve been engaging with advisers to gather real insight about the challenges they’re facing on the front line, so that we can better support them. What’s clear is that they are dealing with a whole raft of issues - not least, the pressure from coping with increased demand on their businesses. The upside to this is that protection seems to be very much on people’s radar.

“Our role in supporting advisers and making their lives easier is more important than ever. This includes a commitment to providing the best service possible and making them and customers aware of all of the additional support they can access through their protection product. Things like Zurich’s Support Services which offers counselling and support with mental health and plus round the clock advice on everything from debt management through to sourcing elder care.”

Commenting on the findings, Paul Shearman, Mortgage and Protection Director at Openwork said “The past 12 months have indeed proved challenging for advisers as our businesses have been impacted directly by disruption in the economy, changes to regulation as well as to the products and services we’re supporting customers with - which in turn drives up enquires.

“At the same time, we’re working to reassure customers, with many anxious about their finances as they face job losses or cuts to household income. Concerns about their own health and family members are also driving an increased awareness and need for protection – advisers need to rise to the challenge and ensure they keeping close to their clients, educating them on the protection they may already have and putting into place new cover as needed.”

In May, Zurich launched a range of measures to support its UK customers, including deferred premiums to help with the temporary reduction or loss of household income. Its Life Protection Platform customers have been given the option to decrease their sum assured for 6 months and then increase it back to the original level without the need for any underwriting. For Income Protection, career break restrictions have also been relaxed to allow people to reduce their cover level and premiums at any time during their policy.

Zurich continues to review its customer response to the Covid-19 situation on an ongoing basis.

¹ Online survey (15th October – 22nd December 2020) 94 respondents