Business
Personalisation is key for advice
By Tiina Björk, Chief Design Officer at Anorak – the independent online broker for life insurance, income protection and critical illness cover – outlines how advisers can best address the growing advice gap through personalisation
As encouraging as the economic recovery has been in the past year, the consequences of the pandemic are still being felt, with many households in deep financial difficulty. According to the August 2021 Money Statistics, produced by The Money Charity, 2021 will end with 7 million UK adults in a “vulnerable situation”, and 9 million struggling to cope with finances and managing money.
While 2020 has been hard for everyone, women have been one of the hardest groups hit financially, with analysis by the Office for National Statistics (ONS) concluding that women’s wellbeing has been impacted more drastically than mens. With women more likely to be furloughed and taking the brunt of childcare responsibilities while working from home, it is no surprise that women are more concerned about personal finances, mental health and work stress than men.
Given these rising figures and growing concerns, you would expect there to be an increase in people seeking out financial products, such as income protection or life insurance to shore up their financial futures, but sadly only 11% of the population have taken out protection products.
To understand this disconnect between financial difficulties and seeking advice, we conducted some research of 2,000 Brits and found that a lack of knowledge of these products was one of the biggest barriers people faced, with nearly half of women admitting to not understanding what income protection was and 48% of men believing they would need help working out what life insurance cover they would need.
With a divide emerging between individuals and financial advice and 2022 on the horizon, now is a good time for advisers to assess whether the service they provide is truly reflective of modern households and, if not, how they can improve their relevance to everyone with a protection need.
From alienation to personalisation
Historically, financial advice has been more focused on the male population, with many advisers subconsciously adhering to outdated stereotypes that put men in the driving seat. To be more precise, both male and female financial advisers spend 60% of their time on the man without realising, when addressing a heterosexual couple, according to a study from Merrill Lynch Wealth Management that used eye-tracking technology. It is this type of mindset that needs shaking up as we enter a new year.
As new necessities, behaviours and milestones emerge from the pandemic – especially amongst Gen Zs and millennials – advisers should consider individual motivations for taking out insurance offerings. Through our research, we found that becoming a parent, buying a first home or having someone close to them become ill without cover were among the biggest motivators, but women were also more like inclined to take out insurance as a result of the pandemic and Generation X were more likely to buy coverage to make sure others were cared for. Clearly, everyone has different motivations for taking out insurance, and their wants and needs should not be forced to fit into an antiquated narrative that currently puts men and traditional household structures at the forefront.
At a time of personalised TV recommendations through Netflix and tailored shopping lists with Amazon, we should be promoting a personalised approach to advice. 2022 will surely bring further new milestones amongst the population, and it is a good time for advisers to focus on providing easy access to bespoke, unbiased advice that caters to individuals own experiences and needs.
By acknowledging the discrepancies between individual experiences and the need for protection advice, advisers can enter the new year with a fresh, inclusive and unbiased approach that will ensure that everyone who needs protection can get it.
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