Don’t let house purchase falls affect protection advice

Mortgage lending growth this year is expected to be driven by a continuing rise in remortgaging, which is seemingly replacing a steady decline in house purchase approvals. We’ve also seen a huge increase in product transfer business conducted through intermediaries in the last quarter of 2017, and which is continuing into 2018.

But as we start to track and analyse these lending trends, which appear relatively positive on the face of it, let’s not underestimate the potential knock-on impact this could have on wider financial advice if these trends continue.

To a large extent, a protection conversation with a client forms part of a daily routine for many advisers when it comes to providing mortgage advice for first time buyers and home movers. The question to ask ourselves is if the same depth of discussion is provided as part of the normal service to remortgage customers? If not then what could the impact be if remortgages and product transfers take up a larger proportion of the overall business mix in the future?

After all, when it comes to remortgage and product transfer clients, a lot can change throughout the course of a typical mortgage term. Whether that’s a career promotion, having children or getting married – to name just a few typical life stages and milestones. Furthermore, whereas affordability may have been a sticking point with the client’s previous mortgage, their financial circumstances could be significantly different this time around.

All of these facts will obviously be collated as part of the advice process to secure a new mortgage product, so introducing protection into the conversation is a natural step that’s not too onerous on the client’s time either.

Advisers are certainly in the box seat to provide this financial education to their existing clients, and it will very often prompt the client to give serious consideration to their protection needs. Of course these issues are just as relevant to people who are renting, so this conversation isn’t just limited to those clients with mortgages.

What is clear is that every conversation is an opportunity to talk about protection, because in all likelihood there will be something that has changed in a client’s life since the last time a conversation took place. Life has a habit of doing that to people, so make it your habit to check in with your clients and understand each and every situation. It’s what they expect from you as their adviser – and it’s not just reserved for home movers and first time buyers.

Mark Graves is Managing Director at Sesame and PMS

Author

Mark Graves is Managing Director at Sesame and PMS

With 20 years industry experience, Mark previously worked at LSL for 10 years in a range of senior roles, which included leading the Pink Network. Earlier in his career, Mark helped to build one of the largest mortgage brokerages as Managing Director of Mortgages Direct. In 2003 Mark set up his own mortgage business, Linear Mortgage Network, which was later acquired by LSL.