Emma Vaughan , Head of Protection and Health Solutions , Simplybiz

For mortgage and wealth advisers , the primary focus is often on helping clients secure loans , manage investments and plan for their financial future . However , there is a critical aspect of financial planning that is sometimes overlooked : business protection . Business protection involves safeguarding a business against financial risks that can arise from the loss of key personnel , the inability to repay loans or unforeseen events that could disrupt operations . By integrating business protection into their advice process , mortgage and wealth advisers can provide a more comprehensive service to their clients , helping to secure both personal and business financial stability .

Understanding business protection

Before advisers can effectively integrate business protection into their advice process , it ’ s important to understand what it entails . Business protection typically includes various types of insurance and financial products designed to protect a business in the event of the death , illness or incapacitation of key personnel . These products include :

1 . Key person insurance : Provides a payout to the business if a key individual , such as a founder or top executive , becomes seriously ill or dies . This money can be used to cover the costs of finding and training a replacement or to mitigate financial losses during the transition period .

2 . Shareholder protection : Ensures that if a shareholder dies or becomes critically ill , the remaining shareholders have the funds necessary to buy out the deceased or incapacitated shareholder ’ s interest in the business . This helps maintain control of the company and prevents unwanted parties from acquiring shares .

3 . Business loan protection : Pays off outstanding business loans if a key person responsible for repaying the loan dies or becomes critically ill . This prevents the burden of loan repayment from falling on the remaining business partners or family members .

4 . Relevant life policies : These are life insurance policies that a business can take out on behalf of its employees , including directors . They are tax-efficient and can provide significant benefits for both the employer and the employee ’ s family .

FOR MANY CLIENTS , THEIR BUSINESS IS NOT JUST THEIR LIVELIHOOD BUT ALSO A KEY PART OF THEIR WEALTH AND LEGACY .

Without adequate protection , the sudden loss of a key person or the inability to service business debt could lead to financial ruin – not only for the business but also for the owners and their families . Business protection ensures that , in the event of a crisis , the business can continue to operate , protecting both the company and the personal wealth of its owners .

Identifying opportunities for business protection in client conversations

Mortgage and wealth advisers often have deep , trusting relationships with their clients , making them ideally positioned to discuss business protection . Here ’ s how advisers can identify opportunities to introduce business protection into their advice process :

10 | PROTECTION ADVISER | AUTUMN 2024 |