This generation have already shown themselves to be tech savvy and research led, with recent study from LV revealing that more than 8 million 22-44 year-olds have considered income protection in the last three months.
David Vanek is chief executive and co-founder of Anorak
Rishi Sunak’s Spring Budget was a blessing for younger buyers looking to take their first step into the housing market, by taking advantage of the new 5% deposit mortgages and an extension to the stamp duty holiday until the end of June.
This generation have already shown themselves to be tech savvy and research led, with recent study from LV revealing that more than 8 million 22-44 year-olds have considered income protection in the last three months.
As the understanding of the value of protection grows in response to the coronavirus pandemic, 40% of 25-44 year-olds with no life cover are now considering life assurance, with an increase in demand for fair, transparent advice.
As ‘Generation Rent’ becomes ‘Generation Buy’, there is an increased need for financial protection, and advisers have an invaluable role to play in providing impartial advice and identifying protection gaps, whilst ensuring millennials receive the best mortgage arrangements for them.
Staying one step ahead
It’s likely that millennial customers would’ve done their research when it comes to finding the right mortgage, with younger buyers used to using price comparison websites and online advice platforms to suss out the best deals before speaking to an adviser in person.
Following the pandemic, these young buyers are gravitating towards protection policies as a way to safeguard their financial future.
So, understanding the variety of policies available and which might satisfy their needs best, is key to winning trust and educating your clients accordingly.
Let’s turn Generation Buy into Generation Protected
It’s imperative that mortgage brokers react to these trends, and understand how to best factor in and recommend protection when advising younger buyers.
The industry keeps dwelling on the protection gap. Yet nothing changes. The protection gap is partly due to an advice gap.
Will Generation Buy have the privilege to become Generation Protected? Will the new generation of mortgage advisers ingrain protection into their advice to clients?
Currently many mortgage advisers shy away from selling protection for a number of reasons including, a lack of confidence and knowledge, the compliance overheads plus clunky processes and systems.
With so many options available to millennial customers today including challenger banks, money apps, online retailers and investment platforms; younger customers are increasingly moving away from a one-size-fits-all relationship with their financial service providers.
Proprietary technologies such as Anorak’s platform instantly factor in these complicated and often disjointed variables, to understand how different services interconnect, helping to streamline the research process for mortgage brokers.
Leveraging technology to empower your clients to make the best choices
There is a responsibility and a desire from brokers to further educate their clients and to help them to make the best financial decisions. Despite this, 50% of mortgages in the UK are still not protected.
It is vital that the long-term implications of mortgage commitments are discussed with clients as well as the solutions to mitigate the risks.
At a time of immense change for the sector, and economic uncertainty for us all, technology better enables this education process, supporting mortgage brokers in efficiently and compliantly protecting their clients’ best interests.
If you won’t do it, who will?
If you do not feel that protection sales are part of the proposition that you want to offer your clients, it’s important you don’t leave them exposed to the risks this entails.
Instead, refer them to a partner who does offer a protection advice service, as this ‘signposting’ option will lead to a better outcome for your client than living without protection.
