The financial services industry has taken a few hard knocks over
the years, possibly starting with the mis-selling of endowment policies,
this has caused many people to be cautious when it comes to taking out a
mortgage or some form of income protection insurance. Many first time
buyers who took out endowments did not fully understand the implications
of an interest only mortgage supported by an endowment. For many the
realisation came all too late that the amount they had borrowed had not
actually reduced so they still owed the lender the same amount as in day
one. This of course led to numerous complaints and in many cases when
the mis-selling of the endowment was proven the borrower was compensated
accordingly.
So what was the real problem with endowments, as they did pay out the full amount that was owed on the mortgage should any of the policyholders die prematurely. Well the real problem was caused by using growth rates on the endowment quotation with a range of 8% to 12% widely used for the investment calculation. To expect this average to be met over a large number of years proved unrealistic and left many borrowers in the lurch. Other areas that left a bad taste in the mouth have been the investment advice given out to many of the older generation who's money went into stocks and shares. Some of these people had a low risk profile and would not have invested in this way had the old adage of shares can go down as well as up had been properly explained. Of course many of these investors have done well when they have been prepared to leave their money locked in for the medium to long term but for those requiring immediate access it proved a failure as many panicked when their investment lost money in the early stages and cashed in their shares.
There are of course other areas that have left the public distrusting financial institutions, very high bank charges for exceeding your overdraft limit, the PPI scandal, massive interest rates on credit cards and many firms being fined, censured or even closed down by the FSA. So how do you develop client trust? Well surely the first step is to know your client and fully understand their needs and aspirations. By completing a Fact Find this gives you an understanding of their current situation so you can come up with the right solutions for both the present and the future. Showing your client you have their interests at heart is easily achievable by printing off research documents that prove you have found them the most efficient and cost effective way of meeting their needs. If you concentrate on building up this relationship over time you will truly develop a bond between you and the client that will last and they will feel much more secure about you dealing with their mortgage, endowment or income protection insurance.
So what was the real problem with endowments, as they did pay out the full amount that was owed on the mortgage should any of the policyholders die prematurely. Well the real problem was caused by using growth rates on the endowment quotation with a range of 8% to 12% widely used for the investment calculation. To expect this average to be met over a large number of years proved unrealistic and left many borrowers in the lurch. Other areas that left a bad taste in the mouth have been the investment advice given out to many of the older generation who's money went into stocks and shares. Some of these people had a low risk profile and would not have invested in this way had the old adage of shares can go down as well as up had been properly explained. Of course many of these investors have done well when they have been prepared to leave their money locked in for the medium to long term but for those requiring immediate access it proved a failure as many panicked when their investment lost money in the early stages and cashed in their shares.
There are of course other areas that have left the public distrusting financial institutions, very high bank charges for exceeding your overdraft limit, the PPI scandal, massive interest rates on credit cards and many firms being fined, censured or even closed down by the FSA. So how do you develop client trust? Well surely the first step is to know your client and fully understand their needs and aspirations. By completing a Fact Find this gives you an understanding of their current situation so you can come up with the right solutions for both the present and the future. Showing your client you have their interests at heart is easily achievable by printing off research documents that prove you have found them the most efficient and cost effective way of meeting their needs. If you concentrate on building up this relationship over time you will truly develop a bond between you and the client that will last and they will feel much more secure about you dealing with their mortgage, endowment or income protection insurance.
Written by E-Commerce Manager of Armchair Mortgages, Chris Roche. For more information on income protection, mortgage protection or life assurance plans check out our site and give us a call for a UK income protection insurance quote.
Article Source:
http://EzineArticles.com/?expert=Chris_Roche
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