Advisers have seen demand for their services increase and their workload rise because of coronavirus.
As a knock-on effect, product providers have also been in demand during this tumultuous time as people look towards life insurance and pensions to ensure they are not caught out again financially.
In a bid to understand how covid-19 has changed the provider landscape, International Adviser reached out to life insurers and pension firms to discuss how the pandemic has impacted them.
“More customers are completing life insurance applications on price comparison websites or via advisers who help customers who started an application on a comparison site,” said Tom Dunbar, distribution director at Royal London Intermediary.
“Customers are also delaying decisions around retirement and accessing funds.
“Some customers are moving from passive to active investments and some have taken advantage of lower prices to increase regular contributions.”
Keith Richards, chief executive of the Personal Finance Society (PFS), said: “The impact of the current crisis on consumers has been severe and highlights the value of financial planning, and the importance of insurance to protect against the risks in life we all face.”
He added that insurers should expect more scrutiny from advisers and clients to make sure their “needs are fully met with the most suitable solution”.
So, what have people been looking for in the pension and life insurance space, has there been a rise in demand for particular products?
Andrew Tully, technical director at Canada Life, said: “Despite investment waters calming somewhat over recent weeks, we’ve seen an increase in both fixed-term and lifetime annuity quotes.”
Dunbar added: “We have seen greater customer demand for protection cover.
“For example, more customers want more customised protection products which blend life cover, critical illness and income protection to match their needs.
“We have also seen growth in business protection as business owners become more aware of the risks they face and think more deeply about passing on the value of their business to their family.
“More recently, we have seen an increase in relevant life protection applications from advisers often working in partnership with accountants.”
But it’s just not just product queries that are driving advisers and customers to contact providers.
They have also become something of a one-stop-shop for tech issues.
Vince Smith-Hughes, director of specialist business support at Prudential UK, said: “There’s been a rise in requests from advisers asking us to work with them in different ways, primarily helping them to find ways to manage their client’s business online.”
Royal London’s Dunbar added: “Generally, advisers are not requesting new products but more digital services, for example more signature-less and paper-less processes.”
People have been very innovative to meet the demands of the ever-changing world, and so have product providers, as they try and meet the needs of UK financial advisers.
“It’s about making our existing products more accessible, removing the need for signatures and putting more processes online,” Smith-Hughes added.
“It’s also fair to say that, during these turbulent times, some advisers and clients have welcomed products; such as smoothed funds, which can offer a degree of protection against day-to-day market volatility.”
Future of the intermediary relationship
There is no doubt that this has changed the intermediary market, but what will it look like in the long-term?
Peter Bradshaw, director at Selectapension, believes there will be more interaction using video links rather than traditional face-to-face meetings; “which could, in the long term, offer greater flexibility in working practices”.
Prudential’s Smith-Hughes said: “A lot of changes we’re seeing, especially the use of technology and digital enhancements, won’t be temporary.
“Going forward much more business will be transacted online as people get used to operating in a more virtual world.
“We’ll deal with each other face-to-face less and make more use of technology.”
Dunbar added: “Most advisers generate the majority of their income from annual charges on client assets, so revenues have fallen not stopped.
“We expect advisers to seek new clients and new revenue streams such as protection or workplace pensions.
“Covid-19 presents an opportunity for insurers and advisers to work together to deliver for customers when they need us most.
“This might be advisers giving customers the confidence to remain invested or insurers paying out death claims. Insurers also need to stay close to the challenges facing advisers.”
Overall, how will the pandemic impact the financial advice market as a whole?
PFS’ Richards said: “This is an opportunity for the financial services sector to step up to the plate and demonstrate its true value in society, whilst also offering a renewed opportunity to address many of the negative perceptions, real or not, and build a level of the public’s confidence and trust in our profession which the sector deserves.”
Tully added: “My hope is, as an industry, we can continue to show the value we provide and encourage more people to engage with financial planning and seek advice.”