The unique liquidity conditions in the current market mean that the availability of mortgages is limited, which means that house purchases are down. Legal & General argues that this is the ideal time for advisers to push protection, and of course, customers will benefit from the peace of mind that protection brings.
Legal & General believes that once an adviser has taken the time to complete a ‘fact find' and get to know the customer for the mortgage sale, there isn't much extra work to do to add on the protection sale. The hard work has been done, so the benefit should be reaped. An example sale for life and critical illness on top of a mortgage could earn an adviser around £1,600, maybe more. Assuming the protection sale takes around 90 minutes, that's over £1000 an hour.
Karen Blatchford, commercial director for housing at Legal & General said: "Brokers must consider broadening their revenue streams to make up the shortfall in proc fees from mortgage business. Protection is the obvious area to focus on, given that much of the groundwork is already done during the mortgage interview. We estimate that earnings per hour are higher for protection, certainly compared to mainstream mortgages, and there is a clear market need for the products."
Even selling some cover is better than none - both for the clients (with costs for, say, an example £125,000 mortgage level term cover for a couple of non-smoking 35 year olds on a 25 year term costing just over £21 per month and for the adviser (who could earn nearly £400 for this sale).
