It’s all go at the Financial Conduct Authority.
A government-sponsored push for growth, a review of the protection market, and an appraisal of ongoing advice – essentially a study into how advisers service their clients over time – are all high on the agenda.
Much of the commentary in recent months has understandably focused on the now-finalised terms of the protection review.
This has sparked endless conversations, evoking hope and fear in varying proportions.
However, amid this focus on protection, it would be easy to overlook the ongoing advice review.
This appraisal remains a top priority.
Indeed, for the thousands of advisers whose scope extends beyond protection and mortgages, this is likely to be a more pressing issue.
If your focus is strictly on mortgages and protection, it might be tempting to dismiss this review—here’s why you shouldn’t
The financial planning sector has long built processes and technology to maintain ongoing client contact, ensuring alignment with financial goals and wealth distribution strategies.
But if your focus is strictly on mortgages and protection, it might be tempting to dismiss this review—here’s why you shouldn’t.
With the latest regulatory terms of reference issued on Friday, the FCA is scrutinising the protection market more closely, examining its operations, competitiveness, and value.
Combine this with Consumer Duty and the rigorous commitment to demonstrating ongoing advice, and the time is ripe for advisers to assess their own practices beyond the initial policy transaction.
Compared to wealth management and financial planning, mortgage and protection advisers are often perceived as transactional.
Clients typically seek them out to address a specific need, such as securing a mortgage or a protection policy.
Once that need is met, they often disengage until their mortgage term nears its end or their policy reaches its expiration.
It is easy to see why the term ‘transactional’ is commonly associated with this sector.
However, this perception is not inevitable.
Increasingly, conversations with leading distributors in the market suggest a growing awareness of the need for change, independent of regulatory pressures.
This shift is partially driven by necessity. Traditionally, the first-time buyer market has been a primary entry point into financial advice.
Yet, as housing affordability declines and the age of first-time buyers rises, this client base is shrinking.
Advisers now face increasing pressure to deepen client relationships and maximise cross-selling opportunities.
One approach is through investments in client engagement strategies, ensuring ongoing communication about relevant market issues.
Mortgage advisers, for example, can provide regular updates on housing market trends and new mortgage products.
While these efforts may not yield immediate results, they cultivate opportunities for future business.
Additionally, mortgage advisers should revisit previous clients to explore protection opportunities that may have been initially unfeasible.
Many first-time buyers operate on tight budgets, making comprehensive protection difficult at the outset.
However, a few years later, their financial circumstances may have improved.
Revisiting these clients presents an opportunity to reassess their protection needs and reinforce the value of advice.
The protection market faces a different yet equally pressing challenge.
Take term assurance as an example. A client purchases a £350,000 policy, hoping they will never need to use it.
As a result, policy documentation is often filed away—physically or digitally—and forgotten.
While protection may not be a “grudge purchase,” its value is not top of mind for clients in the long run.
For advisers, this creates a challenge.
Ensuring that cover remains relevant to the client’s needs is essential, and any re-broking should always be in the customer’s best interest.
The growing trend of value-added benefits in protection products, such as virtual GP services, provides an opportunity for ongoing engagement.
These features offer advisers a reason to maintain contact with clients, helping them derive maximum value from their policies.
However, proper engagement strategies are necessary to capitalize on these opportunities, and that isn’t always happening today.
Technology is often seen as a driver of transactional behaviour, improving process efficiency but reducing relationship depth.
While this is true in some industries, such as retail – where online shopping has weakened relationships with local retailers – the same cannot be said for financial services.
The advice gap is real; there simply aren’t enough expert advisers to serve a population in need of resilient financial plans.
The FCA’s growing focus on ongoing advice is a call to action for mortgage and protection advisers
Technology plays a crucial role in making advice more efficient, enabling advisers to deliver ongoing value and foster deeper client relationships.
By leveraging technology effectively, advisers can enhance their engagement strategies, ensuring clients remain informed and supported throughout their financial journeys.
The FCA’s growing focus on ongoing advice is a call to action for mortgage and protection advisers.
Rather than viewing this scrutiny as a regulatory burden, advisers should see it as an opportunity to refine their business models and strengthen client relationships.
Expanding the scope of engagement, reassessing protection needs over time, and leveraging technology to facilitate ongoing advice will be essential strategies moving forward.
Those who adapt to this changing landscape will not only align with regulatory expectations but also build more resilient and sustainable advisory businesses in the long run.
Stephanie Hydon is director of client distribution at iPipeline
