1. 14 | July 2015 | Covermagazine.co.uk
Interview
Fiona Murphy talks to Hammond Business Partners’ Wes McCranor
about a recent tragedy that brought home the value of business
protection, working with niche businesses, and why he is so
passionate about selling this product
A passion for
business protection
C
OVER has published a
series of pieces to spread
greater awareness of
business protection in the
past few editions.
It is a product that
remains massively
undersold and virtually unknown to
business owners of all shapes and sizes.
But it’s a product that is increasingly
becoming more needed as the self-
employed workforce swells.
One of the things I’ve heard that has
really brought the value of business
protection to life to me in recent months
is an incident at Hammond Business
Partners.
I met Wes McCranor, the director of
Hammond Business Partners, at one of our
COVER Adviser Clinics. Despite being a
business protection specialist, he told me
the value of the product didn’t really hit
home until his business incurred the
massive loss of a key person.
Weeks later we caught up and he
explained: “My business partner had a
heart attack two-and-a-half weeks ago [at
the time of writing]. It’s such a wake-up
call that this happened to us.
“The death of the managing director is
a really big thing. And the fact that it
happened to us is very close to home now.
Dave Hedgecock [the director of
Hammond Business Partners] was a
well-known guy in the industry [in the
Midlands]. He was with us on Friday, had
a heart attack on the golf course and
Sunday I got a phone call. He didn’t use
private medical insurance. He went
through the NHS, and the NHS sent him
home on Sunday.
“He had another heart attack on
Monday. We’re business owners and we’re
directors saying we have to make claims
and handle share purchases. Although we
have provision in place, it’s still very
difficult. We are dealing with it first hand.
“Now here we are in the same
position. It still hasn’t really hit home.
Out of everybody it happened to, it
happened to us. Hammond Group is the
longest running financial firm in the
Midlands.”
Born in the USA
McCranor grew up in Indiana in the US and
worked as a financial adviser for Universal
America. However, he describes his first
experience of selling prior to that by
knocking door to door selling life insurance
products in the cornfields of his
hometown.
After moving to the UK,
McCranor worked as an IFA and
then for PruProtect, whose
products he still primarily sells
with Hammond Business Partners
under a single-tie arrangement,
although of course PruProtect has
now rebranded to VitalityLife.
How did he actually make the
jump into having a primary focus
on business protection in the first
place?
“A year ago my business
partner and I had a grand idea
about selling business
protection. I am really
passionate about protection:
I’ve been doing it since I
started work. I actually learnt
the industry in the States
where protection is obviously a
lot more available. When I came
to the UK I realised that no one
really enjoys the protection

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– is it cancellable? That is a real red flag
for me. I need them to change that
mindset completely.
“I like to say to clients, ‘You’ve been
approved by an insurer for life insurance.
This may never happen again. You don’t
know what’s going to happen today or
tomorrow, you may never be eligible to
take cover out again. Take it and run with
it. Let’s put some cover in place, we can
go up [in terms of sum assured] in the
future, but at least let’s have something
in place.
“It’s like pulling teeth trying to get
people to have the conversation around
protection. People are more interested in
selling or making money. I came back to
the UK when RDR was coming in.”
A ‘backdoor’ approach
I asked McCranor how he actually has that
conversation around protection needs with
business clients.
He explains: “It’s something that
everybody who has a business needs. Its
tax efficient and often you find that
people would prefer to protect their
business than anything else in their life.
“I also see it as a backdoor approach to
introducing protection. Rather than going
into a business and saying that they have
to cover their spouse and kids and their
pet: everyone knows they have to do those
things.
“But I saw it as: your business is your
biggest asset. Without it, a business owner
won’t be able to pay for their house,
generate income and actually cover all of
these things in their lives. I say, let’s cover
your business first. It’s the vehicle that
gets everything else.
“I think people enjoy that conversation
more and business clients are a lot more
susceptible to pay premiums via a
business and do it tax efficiently, it’s
embedded in the UK culture. The business
world is a lot more responsive to the
conversation.
“With relevant life, I had this very
conversation this morning. Rather than
the company director going on the group
life policy with their staff, the
conversation I have is: If your company
market. I was working on the provider
side and banging on IFAs’ doors and
saying, ‘You should sell some life
insurance, your clients need it.’ And they
were saying, ‘We do a little bit of
protection here and there.’ Their whole
focus is on pension and investments.”
Financial culture differences
How does McCranor’s beginnings as a
financial adviser in the US differ to his work
here, in terms of the culture of financial
understanding and selling products day to
day?
He said: “What we did in the States was
we put health insurance in place, then
filled the gap in health insurance with
critical illness. Then we would implement
life insurance to protect their estate and
then we would say, shall we put in some
investments in place to help you make
some of that money back that you’re
paying out?
“The health insurance market in the US
covers only so much, so there are gaps
such as cancer cover that need to be
protected by critical illness. The
long-term care conversation over
there is also larger. They will
take your home or your farm to
cover care costs, so people
know they need to protect
themselves. Understanding
and engaging with financial
products is so embedded in
the culture. I’ve sold to
people in their early 20s
for that reason because it
is cheaper.”
For McCranor there
are lessons he has
learnt from working
both sides of the pond:
“I want to make clients
understand the
severity of what
they’re putting in
place.
“It’s not something
to buy today and
cancel tomorrow. I find
a lot of clients over here
ask with life insurance
winds down, you’ve still got that policy
and you can take it with you. It doesn’t
form part of your lifetime allowance.
“People don’t know these things. I’ve
given seminars and asked business
owners, ‘Do you know what business
protection is?’ One hand raised. But when
you explain it to people, they are
genuinely interested in it. We just need to
get the message out there.”
Contractors and cover
McCranor explains that the market he is
most looking to attract is contractors with
the company primarily dealing with IT
contractors, surveyors, architects. He also
has an interest in hedge funds.
Of this market he said: “Contractors get
paid a bit more because they are
contracting but they’re not receiving
workplace national insurance or employee
benefits or sick pay. When you approach
them, use that ‘key man’ term.
“With a one man band firm, that
contractor is the key man. I say to them,
‘If you can put a serious illness cover
policy in place, you will get a cash
payment into the business you can use to
replenish lost profits and pay yourself.
Contractors find it so enlightening that
they can do that. There’s nowhere for
them to buy it.”
When I ask further about the single-tie
arrangement with VitalityLife’s products
and whether it limits client choice he says:
“I’ve yet to have a client say to me, which
company am I going with? They genuinely
don’t care. They care about the advice and
what they are getting.”
McCranor adds that ideally he would
like to sell products as packages to
different contractor firms with specific
messages targeted to each type of
contractor. He points to his website as a
source of information for firms.
McCranor’s final message for the market
overall is: “We know the SME sector is
growing every day, yet about only 2% are
covered. I would say there is plenty of the
pie for all of us, but I would say for those
who don’t want to do it, to move out of the
way and let those of us with passion for it,
work with the clients.” l
“[In the US] they will take your home or your farm to cover care costs,
so people know they need to protect themselves. Understanding and
engaging with financial products is so embedded in the culture. I’ve
sold to people in their early 20s for that reason because it is cheaper”