Chris Unwin ‘Chrisisms’

Chris Unwin outlines the value of his ‘Platinum Package’ concept (based around a ‘wants’ analysis rather than a ‘needs’ analysis) and how to trim it when the time is right. These two related articles deliver more fantastic, bite-size, common sense for all risk-focussed advisers…

The Platinum Package

Have you kicked a “needs analysis” into touch and replaced it with a “wants analysis” yet? If so, then it’s time to embrace the concept of “The Platinum Package”

Hopefully most of you have already moved from a needs analysis to a wants analysis and are thereby well on your way to turning a grudge purchase into a fantastic opportunity for your clients. If you haven’t yet made this change, please refer to Chrisism#9 to find out why you should.

It is crucial to understand that it must be the client who verbalises what outcomes they would want

To use a snow skiing analogy, the concept of the wants analysis is akin to starting at the top of the mountain and skiing down as opposed to the needs analysis which is akin to starting at the bottom of the mountain and skiing up, which skiers tell me is much harder and not nearly as much fun!

The wants analysis involves us helping our clients tell us what financial outcomes they would want in certain specific “what if” scenarios. It is crucial to understand that it must be the client who verbalises what outcomes they would want rather than us suggesting what outcomes they should want and them agreeing – and that is why the structure of the questions we ask is so important, because the questions must be as easy as possible for the client to answer:- e.g. ‘In the event of serious illness or accident, where between 0% and 100% would you want your income to be replaced?’

Once we have helped our client verbalise what financial outcomes they would want, we will be in a a position to use our expertise to put together an appropriate combination of types and levels of cover specifically designed to achieve those financial outcomes the client has told us they want – thereby, incidentally, putting as big a tick as possible in the “appropriateness of advice” box. This  will represent the combination of types and levels of cover that the client will need to put in place in order to achieve all of the financial outcomes they have told you they would want – and it is this personal protection package that becomes known as “The Platinum Package”.

When you present the platinum package to your client, it is quite normal for your client’s eyes to drift to the foot of the page and check out the total cost and for them to experience a sharp intake of breath, which is perfectly manageable, as we can then establish how close to that figure they can get day one. This then leads to us helping our client to prioritise the outcomes they want so as to ensure that we are achieving the most important and fundamental outcomes within their budget, but maybe leaving the luxury items until they hopefully have more cash flow. What you want to guard against is putting a platinum package in front of your client, the cost of which produces not just a sharp intake of breath, but more a run for the door scenario, as this is not so manageable.

For this reason, in some cases you may have to do a little trimming of the platinum package before you present it to your client. We will be exploring the topic of “trimming the platinum package to accommodate the budget” in this next “Chrisism”

Trimming the Platinum Package

The types and levels of cover that I would be recommending to my client up front are called “The Platinum Package”, and typically this would not be affordable for the majority of clients. The process of trimming the platinum package to accommodate the client’s budget will therefore usually be one of the 12 steps of my initial advice process. 

The platinum package will be made up of the types and levels of cover that would be required to achieve ALL of the financial outcomes that the client has told me they would WANT in the two specific “what if” scenarios on the Fact Find. Unless the client is pretty young and cashed up, the platinum package is usually going to be unaffordable day one.

When going through the Fact Find, I will have pre-positioned the likelihood of the client’s personal protection package costing somewhere between 4% and 5% of the income that they are securing either for themselves in the event of illness or accident of for their family in the event of their death.

Despite this, more often than not, when the client’s eyes drift to the bottom of the “Circle of Safety” page (which details the recommendations), where the total annual premium is situated, there will typically be a sharp intake of breath and then we take it from there! The sharp intake of breath is manageable, as we simply move to a discussion as to “How close to that figure can you get day one?”. What you want to avoid is a “run for the door” reaction, which is not so manageable”! In this instance, you may want to do a little trimming before you present the recommendations.

It is really important that you present the types and levels of cover in the platinum package as your “recommended strategy” in the SoA, as these are the types and levels of cover required to achieve the financial outcomes the client has told you they want on the Fact Find. You will then need to have another section in your SoA which I called “Client’s Actions”, which detailed the types and levels of cover that the client was proceeding with day one and the reason for the trimming i.e. affordability.

When trimming the platinum package, the one thing we want to avoid if at all possible is any impact on the sums assured, as it will be the sums assured that create the financial choices at claim time, so you may need to think a little bit outside the square (thereby demonstrating to your client your detailed product knowledge) when offering alternative ways of reducing the cost without impacting on the sums assured.

Here are just some of the options you may want to discuss with your client:-

  • Mode of premium payment – since at least your Trauma & IP recommendations would probably initially be on level premiums, this opens up the options of a split between stepped and level premiums
  • Length of waiting period on their Income Protection including the option of a split waiting period (especially for higher earners)
  • The relative merits of “bells and whistles”, i.e. optional extra benefits on the policies, some of which may represent more value than others
  • Own occupation vs Any occupation on TPD & Agreed Value vs Indemnity on Income Protection

This is by no means an exhaustive list of options, but they certainly create plenty of scope for trimming the platinum package with minimum impact on the sums assured.

If any of the above ideas have resonated with you, then imagine how much you would get out of a whole day of ideas!! Well, you don’t have to imagine! REGISTER NOW for my upcoming Risk Workshop in your capital city in the coming weeks. I look forward to seeing you there.

Chris Unwin is a financial adviser of 37 years standing and has been a specialist risk adviser for the last 22 years. His training and consulting business has operated for 12 years and it specialises in helping advisers across the full spectrum of experience with their client engagement skills, both in the risk advice specific space as well as in the more generic soft skills space.

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