Remembering the ‘why’ of financial protection

Often overlooked in favour of ‘sexier’ parts of the financial plan, such as investment strategies, protection is the unsung hero of financial planning. This is the safety net that helps deal with uncertain winds as our clients walk the tightrope of their cash flow and trapeze between their objectives. It is rightly a dull thing, which skulks in the shadows. We only need it when things don’t go to plan and then it needs to do exactly what it says on the tin (like a well known brand of outdoor paint!).

Many people have a very positive view of their health and future. This means that they tend to brush aside the chance that a freak accident or unexpected diagnosis could turn their world upside down. Financial Planners and Paraplanners work together to make sure that clients can get a sense of how they would cope financially if the worst did happen. Some are fortunate to have resources sufficient to cope but this is not often the case – I don’t know what your experience is?

This is where financial protection products come into play. Perhaps an Income Protection plan to provide a replacement income if the chief breadwinner in a young family had to take long term sick leave. Or, Key Man cover, to reduce the impact on a business, of the top salesman being diagnosed with Cancer. They are hopefully rare occurrences but if they do occur they could lead to financial ruin; the right financial protection product could avert this and provide much needed funds at the right time. Cash flow modelling software such as Voyant and Truth can help demonstrate the potential impact of this happening and how the proposed cover could help.

However we do need to get across an understanding of how likely you are to be drawing on these benefits. Hitting the numbers is one way of raising awareness.


These images are taken from the British Heart Foundation and Cancer Research UK. They demonstrate just how likely you are to have just two of the many conditions which clients could be afflicted with. 1.4 million people in the UK over the age of 35 have had a heart attack and each year 146,000 people have a heart attack. 396.2 people per 100,000 of the population were diagnosed with cancer in the UK in 2011.

However in the West we don’t like to think of ourselves as a statistic. We treasure our individuality and don’t tolerate the suggestion that we are the 1 in X who will – fill in the blank! Clearly there are exceptions to the rule though.

In a way the statistics are a small part of the ‘why’ for financial protection products. They deal with a very real impact on life (day to day and long term objectives). For this reason insurers are producing resources such as video interviews with claimants. Telling a real person’s story is powerful because it expresses a very personal ‘why’ and our human empathy creates a connection.

Perhaps some of you have your own stories about you, your family, your acquaintances, or clients. I would suggest that you perhaps share them within your companies and with clients. If you don’t have some perhaps check out some ‘real life’ stories from providers like Bright Grey (

So what does this mean for Paraplanners? Most of what I have talked about is occurring before reports are needed and quotes obtained. Some but not all Paraplanners will meet clients and engage with them on these issues directly.

Firstly as people who work with Financial Planners/Advisors to recommend solutions to clients we need to get the ‘why’. It is easier to write in a convincing manner if you can connect with the why. So we need to understand the value of protection both from a cashflow perspective and an emotional ‘peace of mind’ for the client.

Secondly we need to equip ourselves to demonstrate the need for our clients. This could be as simple as deleting an income stream from an income and expenditure statement. However most of the protection that is written pays out a lump sum rather than replacing an income source. We need to get to grips with cashflow modelling to develop ways of communicating the need better. Not all companies use cash flow modelling regularly for all of their clients, but this a great tool for communicating! Not everyone thinks in numbers and using pictures, graphs and diagrams speak really clearly. Think about how your clients think – ask the Financial Planner/Adviser about this – and make sure that you are not just ‘writing’ but are in fact communicating.

So, this week when you are writing a ‘reasons why’ letter, make sure you remember the why!

Please note that this post is aimed at Paraplanners.  If you need financial advice please speak to a financial adviser.

About Dan Atkinson

A Paraplanner at EQ Investors since August 2010, Dan’s Music Technology degree helps him approach Financial Planning problems creatively. IFP Paraplanner of the Year 2014 and member of the PFS Paraplanner Practitioner Panel, Dan is working towards Chartered status and recently became a CISI Accredited Paraplanner. Dan is also involved in youth work at his local Church in Hatfield.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.