Three advisers’ strategies on insuring professionals

n the rapidly evolving landscape of financial advice in 2024, advisers face unprecedented challenges and opportunities. The increasing demand for high-quality financial advice, amidst an increasingly compact adviser pool, highlights an opportunity for the advice profession to hone innovative strategies tailored to the unique needs of high-earning professionals.

Often time-poor with complex financial needs, these clients seek advisers able to deliver comprehensive, tailored, and efficient wealth and risk management solutions.

Characterised by significant earnings potential, extensive professional networks, and a high propensity for referrals, the professional client segment presents a relatively lucrative opportunity for advisers. Additionally, the heightened financial impact of health traumas on professionals underscores a critical need for robust insurance strategies and the all-important safety nets against life’s uncertainties.

In this context, we explore the philosophies and approaches of three leading advisers: Sue-Ellen Hogan from Riviera Wealth Partners, Stephen Price from Integer Financial Group, and Mark Everingham from Personal Risk Professionals, to illuminate the path for advisers seeking to elevate their practice and attract professionals to their client base.

Differentiate: Each client is unique (but also the same)

While each client’s fact-find reveals unique circumstances, certain needs among high-earning professionals are often remarkably similar. It’s important that advisers understand the typically common needs that higher-earning professionals bring to the table.

The financial impact of health trauma is significantly greater for professionals compared to the general population. High-earning professionals will almost always be treated as a private patient, meaning out of pocket costs can be two to 10 times higher than clients that opt for public health services.

Where a client lives also matters. Professionals often face the ‘postcode multiplier’ – higher medical costs in affluent areas in which they usually reside. Aside from the joy of receiving higher medical bills, advisers will need to consider the financial impact of lost income for high-earning professionals when taking extended or indefinite time off work.

Amongst these professionals, specific health traumas such as cancer emerge as key concerns. The looming financial burden of such diagnoses holds significant weight for high-earning professionals. Adapting advice and insurance protection is vital in safeguarding professionals from these impacts. Advisers play a crucial role in addressing these needs, ensuring adequate trauma and income insurance is in place.

Three quality advisers share their take on addressing professionals’ unique needs

Sue-Ellen Hogan, Riviera Wealth Partners

Sue-Ellen Hogan collaborates closely with Riviera’s strategic financial advisers, in-house accountants, and mortgage brokers to build a dedicated team who will work towards their client’s goals holistically.

A key plank of Sue-Ellen’s income protection philosophy is simple: include the increasing claim option (ICO) for your clients. A long-term medical trauma or diagnosis can place even a high-earning professional in the throes of financial turmoil, as the cost of living, school fees, bills, mortgage payments etc. suddenly build up and become unmanageable.

Hogan strongly advocates for ICO protection to safeguard professionals from the inability to cover overheads in the event of long-term medical trauma.

Hogan stresses that advisers should be mindful of income protection definition changes from ‘own’ to ‘any’, as higher TPD benefits should be implemented.

When advising clients with extensive education and specialized professions, Hogan highly recommends ‘own occupation’ TPD. This definition ensures individualised TPD cover based on their specialised profession – increasing the likelihood of a successful claim.

The increased complexity of specialised, high-earning professionals creates a scenario where more comprehensive trauma insurance solutions are required.

Hogan highlights the importance of adequate protection against the possibility of suffering from multiple traumas in one’s lifetime. She advocates for the ‘trauma reinstatement’ option, allowing clients to reinstate trauma cover after making a claim without needing further medical evidence.

Stephen Price, Integer Financial Group

Stephen Price focuses on comprehensive risk management strategies for medical professionals. Moving away from traditional insurance methods, he advocates incorporating estate and business succession planning to protect long-term financial stability.

He stresses the importance of educational advocacy and underscores the significance of educating medical professionals about the financial impacts of health traumas, and the importance of adequate insurance coverage tailored to mitigate these risks effectively.

In addition to this, he takes a more holistic financial planning approach when advising clients, emphasising the benefits of integrating risk insurance with broader financial planning services such as investment management and tax planning. This provides clients with a more comprehensive and complete financial advisory service.

Mark Everingham, Personal Risk Professionals

Mark Everingham highlights the limitation of income protection for high-income earners, where rising income reduces the proportion that can be protected, creating a significant gap.

To bridge this, he extensively uses TPD and trauma insurance to protect against major debts and lifestyle costs.

He tackles the complex financial structures of high-earning professionals like doctors and lawyers. These professionals often have intricate financial arrangements involving multiple income streams, trusts, and business structures.

Understanding the full scope of a client’s financial situation is essential to determine the correct sums insured. For instance, a multi-doctor practice might have patient fees, service income, and profit distributions that need to be carefully analysed to ensure accurate coverage.

Everingham maps out the ‘flow’ of money to make sure he recommends the correct sum insured for his clients’ needs. This also gives the underwriting team insight as to how the recommended benefit was determined.

Prior to underwriting, he conducts detailed pre-assessments, including personal statements and financial documentation, to pre-emptively address potential issues. He selects insurers that understand profession-specific risks and offer stable premiums, valuing features like profit share pools that add value.

Everingham’s philosophy focuses on a proactive, comprehensive approach with a deep understanding of clients’ evolving medical needs.

The one-size-fits-all approach falls short: Professionals require nuanced strategies

Advisers currently have a significant opportunity to enhance their client base by including professionals.

There’s a gap within this market, and increasing demand for quality advice, as professionals seek advisers who understand their complex needs.

Additionally, a looming $3.5 trillion wealth transfer brings an emerging younger generation of professionals requiring support managing and protecting their finances. These professionals require nuanced strategies that encompassing immediate protection and long-term financial growth.