Unlocking the Value: How Value-Added Benefits Revolutionise Financial Advice

Consumer Duty celebrated its first birthday at the end of July and the impact of the regulation on the protection industry appears to be overwhelmingly positive. Value has become much more central to advice and cover selection. Conversations have gone beyond a focus on premiums, with an additional lens on added value services and ancillary benefits. I’d like to explore the transformative power of VABs, when and how to introduce them, and their real-world impact on clients.

Transformative power of VABs

Consumer Duty has urged advisers to move beyond transactional relationships and embrace holistic conversations with clients. According to FCA research*, a significant 43% of advisers have refined their approach, demonstrating the industry’s commitment to delivering fair value and acting to avoid causing foreseeable harm. The emphasis has certainly broadened into the comprehensive solutions and added services that protection can offer.

Making VABs real for clients

Advisers understand the disruptive potential of VABs, and many have become ambassadors for these benefits. Through meticulous documentation and thorough client education, advisers can enhance the value proposition of protection products, aligning themselves with the principles of Consumer Duty. By providing additional value beyond the core product or service, VABs can increase client retention, elevate the customer experience, and foster brand loyalty.

VABs’ influence on perception

Value Added Benefits have emerged as potential cornerstones of protection propositions, significantly enhancing the perceived value of protection products whilst still being typically a non-contractual benefit. With services available such as 24/7 digital GP appointments, second medical opinion, and mental health support, VABs can empower clients and their families, in turn, positively impacting their well-being.

Evidence of efficacy

Our own research data demonstrates the effectiveness and timely delivery of VABs.** Flexibility is exemplified by the fact that 36% of GP appointments are made outside standard working hours, ensuring clients have convenient access to essential medical assistance. Impressively, 90% of GP appointments are achieved within three working hours, showcasing the efficiency and responsiveness of VABs. Furthermore, mental health appointments are delivered promptly, with 95% taking place within two days. Second medical opinions are obtained in 95% of cases within 10 days, providing peace of mind and valuable insights into healthcare decisions.

The Benefits of Prevention

VABs not only offer reactive support but can also promote preventive measures. By focusing on proactive care, these benefits encourage clients to prioritise their well-being and take preventative action for a healthier future. These are great conversations to have with clients, promoting for example the value of the annual health check, making sure your clients take advantage of these services.

The evolving landscape of protection advice

Since the inception of Consumer Duty, financial advisers have navigated a challenging regulatory landscape while striving to deliver exceptional outcomes for clients. Through clearer communication, diligent product selection, and meticulous processes, advisers have elevated the standards of protection advice. Tools such as sales aids, factsheets and explainer videos that are readily accessible and easy for advisers and importantly clients to understand also assist with the effective delivery of this advice.

At HSBC Life, we provide a reminder of VAB at six months and again each year within our annual reminder statements, as we really want customers to benefit from these services.

Looking ahead, the role of VABs becomes even more apparent – potentially transforming the market, empowering clients, and unlocking the true value of comprehensive financial protection.

For more information on HSBC Life UK’s Value Added Benefits, please visit here.

Source

* FCA: Consumer Duty – The Art of Possible in a Year

** Independent research agency 3Gem Research & Insights: Interviewed a sample of 208 financial advisers across the UK specializing in protection between December 5th and 20th, 2023