Why are mortgages bought and protection sold?

Expert discusses the ins and outs of advising on mortgages and protection

Selling a mortgage should make selling protection insurance simple, so why do many advisers still struggle?

Mortgage Introducer has discussed with an expert the differences between selling mortgages and protection, as well as how Consumer Duty is helping advisers have better conversations with customers about their insurance needs, leading to higher conversions.

What are the different sales dynamics between mortgages and protection?

Ahmed Bawa, chief executive of Rosemount Financial Solutions, said mortgages and protection are like toast and marmalade in their perception of being natural bedfellows, at least by people in this industry.

“However, when it comes down to sitting down with clients across the desk, the two could not present more different challenges,” he said.

Although there are numerous types of mortgages to suit a staggering range of situations, Bawa said the truth is that most mortgages are “bought”.

“The majority of clients require a straightforward product, and it is up to the adviser to pick the best mortgage for them while making sure they know what their clients are signing up for,” he said.

Protection differs, Bawa said, in that even if a client has thought about it, they often decide on it being an unnecessary cost, something to think about what they are older, perhaps.

Protection must therefore, he added, be actively sold - and making this doubly difficult is the negative direction the clients’ imagination must be guided towards when an adviser is explaining just why protection is so important.

“This requires a nimble and nuanced sales technique that is, unfortunately, not adequately covered in the CeMAP qualification courses,” Bawa said. He believes this is the core reason why so many advisers struggle to sell any sort of protection.

How to understand the bigger picture between mortgages and protection?

Bawa believes it is vital to understand protection as being one part of a holistic approach to mortgage advisory.

This is something that Consumer Duty rules cover, Bawa said; and he believes it is a must that advisers identify the scope of protection a client really needs and how such a product would fit into their budget.

“It is important to not look at a client as just the person you are dealing with, but their family, as well; the role of protection is to offer a degree of dignity to a family if they run into trouble,” Bawa said.

A suitable protection product, he said, will not just help them deal with their mortgage, but aid in navigating the tumult that follows damaging events, too.

One of the more useful ways of looking at protection, Bawa said, is through the lens of your role as an adviser. Always keeping in mind that your duty, he added, is not just to help a client and their family buy a house, but to help keep them in their home serves as an effective rallying point when starting the protection conversation.

This approach is both ethical and abides by Consumer Duty requirements, Bawa said, while allowing advisers to forge deeper, more intimate, and more trusting relationships with their clients.

“We know that every high performing adviser is passionate about helping their clients, and so extending this mindset towards protection will make selling it easier, and this will translate to a sincerity that an otherwise more cynical client will respond to positively,” he said.

What are the core differences you find in advising on mortgages and protection? Let us know.