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By Mike Pritchard, Commercial Manager (Distribution Quality & Retention), Legal & General

We all have bills to pay, decisions to make on expenditure and affordability and, critically, predicaments in terms of what we may need to cut out to maintain any form of business or life as usual – because incomes are not keeping pace with rising outgoings.

Here at the DQM headquarters we are carrying out work to predict where those challenges for Intermediaries may be more acute; and may have a detrimental impact on their longevity and L&G’s commercial position. As we all know, those firms who had challenges before the cost of living crisis will only find things more difficult now we’ve entered the, “tough…and getting tougher” zone. Inevitably, there will be some businesses that fail, but if we can support and work with our distribution colleagues and intermediaries, we will do everything possible to assist.

So, what can we suggest that may help firms navigate through the next 18-24 months? I think a few can help but they do require time, effort and a little investment:

Be good communicators

Firms who do not have active client contact programmes are at risk of losing their clients for a couple of reasons:

  1. Lack of information on what they’ve purchased will dent the importance of their policy. Some clients will see it as an expense and not a benefit. The Intermediary should have a continuous plan for promoting the key features and benefits of the product purchased. This is even more important where policyholders have a policy that has indexation. Their 13.5% premium increase, due to inflation, may be a differentiator for retention for some. Additionally, helping customers navigate the cost of living crisis by giving them advice can be beneficial.
  2. Lost from one firm and picked up by another broker. It’s a very dynamic market and one that means advertising pockets can be quite deep. This could mean that clients are tempted to switch one from broker to another.

Added value

For example, Intermediaries who sell protection in trust are 3-4 x more likely to keep their business in force. The reason for this is two-fold:

  1. More and deeper customer interaction. On average, there are 3x more discussions that take place compared to policies that are not written in trust (with or without underwriting), which means not only a deeper factfinding and understanding the customer but a stronger, more substantial relationship being built too. Trusts really can build trust!
  2. Being an advocate for the customer and their family: some Intermediaries are now offering services that are seen as premium services and are a differentiator; separating them from their competitors. For example; offering (free) Wills is gathering serious momentum. It is estimated that 59%* of the UK adult population don’t have a written will. Supporting the customer in an area that gets overlooked is a great opportunity, gives more insight in to the customers financial competence and can help with organic lead generation too.We’ll see some Intermediaries continue to grow and thrive, as the Cost of Living Crisis is seen as an opportunity to work with their existing and new customers to provide them with excellent products that meet their needs.

“With our DQM mantra; ‘keeping good businesses in business’, we aim to work with all of those firms who want our expertise and support.”

Our new DQM pages on the Adviser Centre include podcasts, best practice ideas and ways to improve business quality performance. We also want to see great Intermediary practice at the 2023 Business Quality Awards (BQAs). This is Legal & General’s shop window to highlight the work we all do. The awards promote advisers and firms who aim to be the best of the best, generating great customer outcomes and demonstrating the positive work taking place within this industry. BQA 11 was the biggest, shiniest and without doubt the best event yet.

I hope that you and your firms are ready for the submission window opening for BQA 12 in the autumn. We’re here to help if with your application if you need it, and we look forward to seeing you in London in May 2023.

Find our more about their Business Quality Management Programme