The protection review and the handover to planning
How to run the protection review you already give, the points in it that belong with a financial planner, and how to hand those over without stepping outside your permissions.
How to run the protection review you already give, the points in it that belong with a financial planner, and how to hand those over without stepping outside your permissions.
If your firm holds permission to advise on and arrange non-investment insurance, the protection review on a mortgage case is your advice. Life cover, critical illness cover, income protection and family income benefit all sit with you, along with the suitability of what you recommend and the duty to give the client a fair outcome under Consumer Duty.
A full review asks what happens to the household if one person dies, becomes seriously ill or cannot work. Answering those questions brings up facts about pensions, savings, employer benefits and the estate. You need those facts to size the cover. Some of them also show a planning need outside your permissions.
Start with the cover and benefits the client already holds. It is the step that most changes the recommendation.
Ask for the multiple of salary and whether the client has completed an expression of wishes form with the scheme.
How long full pay lasts, and what the employer pays after that.
Any life or illness cover already held, the sum assured, the term and whether it is written in trust.
The schemes the client belongs to, and whether they have nominated who should receive the benefits on death.
Cash the household could draw on for the first months of an illness.
Record the answers as facts. Do not comment on whether a pension is well invested or whether the client should move it. Those are pension advice questions.
Size the cover against the debt, the family's income need and the time they would need it for. Death-in-service benefit and savings reduce the gap. Bear in mind that death-in-service usually ends when the client leaves the job, so it is a less certain source than a policy the client owns.
Income protection is sized against take-home pay and the length of the employer's sick pay. For self-employed clients there is no employer sick pay to bridge the deferred period, so the deferred period and the client's savings need setting side by side.
Write cover in trust where it suits the client, so the payout reaches the people intended without waiting for probate. Explain what the trust does in plain words and keep a copy of the signed trust form on file.
These are the points where a protection review reaches a question you should not answer. Each one is a reason to offer an introduction.
A client who has never completed an expression of wishes, or completed one before a separation or a new relationship. You can tell them to update it. Advising on how the pension should pass, or whether to move it, is pension advice.
An estate that may exceed the nil-rate bands once the home, savings and, from 6 April 2027, most unused pension funds are counted. Life cover can be part of the answer. The planning that decides how much and in what structure belongs with a planner.
A client with several old workplace pensions who does not know what they are worth.
A director or partner whose share of a business would pass under a will, with no agreement in place for the other owners to buy it.
Large cash balances held for years with no purpose attached.
A mortgage term that runs into retirement with no clear income to pay it.
Raise it at the end of the protection review, once the cover recommendation is complete. Raising it earlier mixes your advice with a question you are passing on.
Wording you can use“We have sorted the cover for the mortgage. Two things came up that are outside what I advise on: your old pensions, and how your estate would be taxed. I work with Equity & General, whose planners advise on both. Would you like me to ask one of them to call you?”
Then follow the introduction steps your firm has agreed: separate consent, a short record and a handover through the partner portal.
Life cover written in trust to meet an inheritance tax bill is a protection product, and you may hold the permission to arrange it. Deciding the size of the bill, whether gifts or other planning would reduce it and how the policy fits the rest of the estate is estate planning.
The best order is for the planner to advise on the estate first. If the plan includes life cover, the planner can tell the client what the cover needs to do, and the client can come back to you to arrange it. Agree that order with the planner before the client is contacted, so the client hears one plan.
Record on your file that the sum assured was based on the planner's recommendation, with the date of that recommendation.
A director borrowing on the strength of company profits depends on the company staying healthy. Key person cover, shareholder protection and relevant life cover all sit inside protection, and where you hold the permission, the advice is yours.
The questions around them belong with a planner. They include how the shares pass on death, whether a cross-option agreement is in place, how the director's pension is funded through the company and how business relief applies to the estate. Introduce the director for those, and keep the protection advice with you.
If the director has an accountant, ask whether they would like the planner to speak to the accountant as well. Some of the answers depend on how the company pays the director, which is a matter for the accountant.
A new partner, a new child, a separation or a death in the family changes who depends on whom. Each is a reason to review cover, and each can leave a pension nomination or a will out of date.
You can review the cover. You can also tell the client that a separation or a new relationship is a reason to check their will and their pension nominations. Advice on how the pension and the estate should pass belongs with a planner, and the will belongs with a solicitor.
Protection needs change with the mortgage. Each time a client remortgages, moves or takes a further advance, review the cover against the new debt and the household's current position.
Use the same review to ask whether anything has changed that a planner should know about. If the client already has a planner at Equity & General through your introduction, tell the client you will let the planner know about the new mortgage, with their agreement, so the plan stays current.
Which past clients to contact first, what the data rules allow, how to word the message and what to record.
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Running a lifetime mortgage or retirement interest-only case so the estate, pensions and family are considered before the lending is agreed.
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How the income evidence on a self-employed or director case points to planning needs, and when to introduce the client.
Read itYour firm keeps the mortgage and protection advice. Equity & General gives the pension, investment and estate planning advice, and a named partnership manager sets the arrangement up with you.