The linkage with their goals becomes a powerful planning scenario, bringing our clients closer to their financial plan and an appreciation of the value of advice.
Goals-based planning has become increasingly popular, with many advisers seeking to build closer and deeper relationships with their clients. This has not, however, resulted in a significant reduction in the protection gap, despite the reality that the loss of a spouse or main income can significantly impact on achieving the aspired goal.
Protection was the cornerstone of the advice profession, and one of the lasting legacies of the current pandemic should be the refocus on protection needs in financial planning.
Plugging the protection gap
Now more than ever, advisers should be having professional, balanced, sensitive and client-centred conversations about their clients’ individual and business protection plans, founded on carefully constructed audits.
Asking clients to look at their own circumstances through protection health checks is an effective way of assessing their understanding, stimulating a discussion and enabling them to assess the risks.
Beyond the current crisis, there is still no doubt of the absolute responsibility that financial advisers have in challenging clients about the level of the protection they have in place, if the industry is to expose and help plug the protection gap.
By engaging clients in a protection conversation, not only could the profession make an impact on the protection gap, but we may also see our clients’ financial plans becoming more robust and help them achieve their long-term goals.
Edward Grant is a chartered financial planner at St James’s Place
