St. James’s Place (SJP) has seen its protection planning division place its 20,000th policy on risk.
Launched in April 2019 with two advisers and a small support team, SJP Protection Planning, a subsidiary of St. James’s Place Wealth Management, has since received more than 33,000 referrals from over 3,000 SJP Partners and advisers.
The milestone comes amid renewed focus on the UK’s ‘protection gap’ – the difference between the financial protection people may need and the cover they have in place.
The FCA’s interim Pure Protection Market Study found that 58% of adults do not hold a pure protection product, with 59% of those having never considered their protection needs. Separate analysis commissioned for the study estimated that around 72% of identified protection needs are not covered.
The FCA found that a lack of awareness or prompts to consider protection can contribute to this gap, alongside factors including affordability, misconceptions about protection and friction in the sales process. It is working with firms, trade bodies and consumer organisations to consider how the industry can improve awareness and access to appropriate protection.
This focus also sits against the broader expectations of the Consumer Duty, under which firms must act to deliver good outcomes for retail customers, avoid foreseeable harm and enable and support customers to pursue their financial objectives.
Signposting can help turn awareness into action
Protection needs can emerge through many different financial conversations. Buying a home, starting a family, becoming self-employed, establishing a business, investing for the future or planning an estate can all create or reveal financial commitments that could be affected if someone dies, becomes seriously ill or is unable to work.
Advisers who identify that potential need may not always have the specialist expertise or capacity to provide protection advice themselves. Having a clear referral route can help ensure the conversation does not stop there.
With a client’s agreement, an adviser can introduce a specialist who can assess their circumstances, consider appropriate options and manage the advice and application process, while the original adviser remains focused on the client’s wider financial plan.
David Mead, head of protection at St. James’s Place, said: “Reaching 20,000 policies is a significant milestone, but more important is that families and businesses have support in place when the unexpected happens. The claims we have seen paid as a result of our work are a powerful reminder of why having these conversations matters.
"Despite this, the protection gap looms large across the UK and is not something we can solve alone. Mortgage, pension and investment advisers are often well placed to recognise when a client could be financially exposed, even where protection isn’t their own area of expertise. Collaboration across the industry is vital to turn this recognition into action.
“Effective signposting can play an important role. It allows advisers to keep the wider financial picture in view while connecting clients with specialist expertise where it is needed. With the FCA putting renewed focus on the protection gap and good customer outcomes central under Consumer Duty, there is a real opportunity for the industry to make these conversations a more consistent part of financial planning.”
David Mead shares five recommendations for adviser firms to bolster signposting to close the protection gap:
1. Recognising the triggers – build protection considerations into relevant conversations and life events, such as taking on a mortgage, starting a family, becoming self-employed, establishing a business or beginning estate planning.
2. Explaining why protection may be relevant – help the client understand the financial risk that has been identified and why speaking to a specialist could be useful in the context of their wider plans.
3. Making an active introduction – with the client’s agreement, introduce them directly to an appropriate specialist rather than simply providing contact details and relying on them to take the next step.
4. Making responsibilities clear – ensure clients understand which firm or adviser is providing the protection advice, who will manage the application and how this fits alongside their existing advice relationship.
5. Checking for gaps – keep reviewing policies at each annual review, to ensure protection is still suitable for the client’s circumstances.
