107 | Business Protection

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  • Richard Kateley, Head of Intermediary Development, Legal & General

Learning outcomes:

  1. The changing dynamics of the SME market
  2. The reasons for the lack of take up in business protection
  3. The potential growth opportunities available to advisers

State of nation report

rough guide to business protection

L&G business protection website


Learning outcomes: 1. The changing dynamics of the SME market 2. The reasons for the lack of take up in business protection 3. The potential growth opportunities available to advisers PRESENTER: Richard, as a product provider, why did you do this research? RICHARD KATELEY: Well we’ve been doing this research since 2009 really to first of gauge the potential for us as an insurer: is it a market we want to get into? Secondly to, as we’ve gone on to see if the market’s changed, because quite often these businesses do change. And probably thirdly the overarching one is to really see if advisers have a marketplace to go to. And whether we can help them develop a new marketplace. There’s a huge amount of lack of awareness I guess in the marketplace, and we just need to point that out to financial advisers and show them that there is a potential marketplace for them to go at. PRESENTER: Well you’ve been doing this research for a number of years now, I think this is your fifth edition, has it helped advisers? RICHARD KATELEY: I think it has. I think it’s helped to highlight how the market’s changed over time, because the market really has changed. I mean StartUp Britain, who is a government-based body, they’ve looked at how the market’s grown, and 80 firms, last year there was a record 80 firms an hour being set up, so there’s a huge new opportunity for them. There’s been more providers coming into the marketplace. Back in 2009 there were very few actually in the marketplace. We were one of the only ones doing it. But now there’s more providers. Which is great, there’s more products, there’s more choice, and it shows to advisers that there is a huge opportunity for them. PRESENTER: Lending conditions for small businesses, what are they looking like these days? RICHARD KATELEY: They’ve greatly improved. I mean when we started doing this you have to understand we’re coming off the back of the recession, and banks and building societies were less inclined to lend to SMEs in those days. We’ve found anecdotal evidence that banks now are getting better, the loans that businesses are taking out. We’ve shown it in our research in fact that last time we did the research 2014 only 50-odd percent of the companies admitted having any form of debt. This time it’s up to 65%. So it shows that more and more companies are taking out loans, which is showing that there’s confidence in the banks to lend to SMEs. PRESENTER: And what sort of awareness have SMEs got of business protection as an issue? RICHARD KATELEY: Generally very small. I mean this is one thing that hasn’t changed since we’ve done the research. When we start going out there talking to business owners, actually talking to them and finding out if they know the risks that they’re running, whether they understand what a key person is, share protection, what would happen if one of them was to die, the awareness is very low. And I think this is one of the great opportunities for advisers to go out and talk to small businesses. I mean we talked to a lot of advisers actually, and a lot of them don’t have this protection because they haven’t thought, they are businessmen in their own rights, but they haven’t taken out the insurance either. So there is a huge opportunity, and that’s what we’re trying to do with this research, probably the overarching view of this research is to try and encourage people to go and talk to small businesses. PRESENTER: And all those businesses that you’ve interviewed over the years of doing this research, have you ever gone back and seen if on the back of making them aware they’ve been more likely to take out protection? RICHARD KATELEY: All we can do is the anecdotal stuff when talking to advisers. And most of the advisers that really do get into this marketplace do find once they’ve spoken to a company they are much more likely to take this sort of cover out, and the main reason for not taking it out is the lack of awareness. So no we haven’t personally gone back, but we do know by talking to advisers that firms that have taken it out it’s opening their eyes to a risk that they never knew existed. PRESENTER: So how statistically significant was the research that you’ve done? RICHARD KATELEY: Well we wanted to make sure that it was meaningful. So we had just over 800 business owners across the United Kingdom that we spoke to. And those varied from very young companies, less than a year old, to companies over 40 years old, so it was a really good spectrum. We also made sure that we reduced the sole trader exposure, because there were quite a lot of sole traders out there, and we didn’t want that to influence the data. Because a lot of sole traders, you’re talking more personal protection than business protection. Not always but quite often. So we reduced that to just 25% of the segment. So the rest were made up of limited companies, LLPs and partnerships. So I think it is quite a meaningful segment of the business. PRESENTER: What would you say were the top three findings from the research? RICHARD KATELEY: So for me probably the awareness is the biggest one. The fact that business owners don’t know about it and the effect that advising can have for these businesses. I’ll give you an example. For debt protection, we found that 84% of the businesses that had taken out a debt and insured themselves against that debt. They only did so because they went and spoke to a financial adviser. So there’s no self-recognition of the risk that they’re running. It was the advice that really was the pivotal point for these companies to protect themselves against debt they’re taking out. And so for me that was probably the biggest thing for advisers to think about. PRESENTER: So is there much negativity towards protection, or is it just a case that people haven’t heard of it? RICHARD KATELEY: None at all. None of the reasons that the businesses gave us were the fact that I don’t want insurance, people have spoken to us about it. So another reason for advisers to get into this, you are pushing against an open door: (a) the businesses don’t know that they’re running a risk; (b) they don’t know that there are solutions out there; and (c) they understand when you explain to them the dangers they’re running that actually protection makes sense. PRESENTER: And you’re talking about them running risks, how big are the risks that they’re running of not having protection? RICHARD KATELEY: A lot of them can be terminal. If you look at a key person within a small business, in the UK at the moment there are about 5.4 million private sector businesses, and of those about 95% have got less than 10 employees in them. And when you’re looking at a small business that has less than 10 employees, one person can make a real difference. By losing that one person it could cause the decline of that business totally; whereas a simple policy can inject that business with some cash, and allowing them to carry on trading. Shareholder protection, again if a shareholder dies can the business raise that cash? It can be a real problem. So I would say some of these problems can be very serious. And let me give you one real crunching stat from the research which really struck me is that 53% of the businesses we spoke to, once they’ve thought about it, they lost a key person or a business owner, they would not survive 12 months, which is half those 5.4 million businesses potentially could go out of business by losing one person. So if you want to put it into perspective that’s how serious it can be. PRESENTER: But looking over the six years that you’ve been doing this survey, what changes have you noted? RICHARD KATELEY: The market’s got bigger. So, as I say earlier, the number of firms have increased 80 an hour quoted last year. We’ve also noticed that the, we monitor a thing called the death and birth rate of companies, and we’re finding that the divergence between the death and the birth has increased: 14% increase in births and 10% less decrease in deaths. So it shows the market’s growing. As I say advisers are becoming more aware of it, and I put a lot of that down to the research that we’ve tried to do and get out to the marketplace. And more providers have come in. Legislatively probably not a huge amount has changed with the products we actually use, because we’re only using term assurances and critical illnesses. So there’s not been a huge amount of change there. But I guess the biggest change since we very first started doing the research was the introduction of the relevant life plan, which was brought in in 2009 and has really started to take the market by storm. And in fact at L&G we’re finding now that relevant life plan outsells other business protection policies put together. So it’s a big area. So that’s probably the biggest product change. But as I say legislation hasn’t really changed. We’ve had the introduction of auto-enrolment, and what that’s done is although it hasn’t affected the businesses as such as far as business protection is concerned. What it has given is advisers the opportunity to go and talk to these businesses. Because now smaller businesses, SMEs, are being affected by staging dates of auto-enrolment, and it can be quite a good way into that marketplace. PRESENTER: Much debt in the system? RICHARD KATELEY: It’s grown and it’s growing. As I said when we first did this research debt was quite low. It was about 32% from memory. Now it’s 64%, so more and more businesses are taking out debt to help them grow. Some people say well is that a good thing or is that a bad thing? Personally I think it’s a good thing. I think it shows that there’s confidence in the marketplace that these small businesses are wanting to grow. I think it shows that banks and building societies are more willing to lend to SMEs, although the makeup of the debt is sometimes contradicting that. PRESENTER: And going back to the research and everybody you spoke to, what percentage of people in business were women? RICHARD KATELEY: Of the sector we looked at 15% were all female-led businesses. And over the last four or five years we’ve seen that percentage in the marketplace generally has increased. I think in total it’s around 18% across the business sector now. But in our research it was just 15%. And the interesting thing with female run businesses is they’re much more open to the need for protection. Women tend to have a better risk profile, and they’re more open to be talked to about protection. So actually if you are going out to talk to people don’t just think about the business itself, think about the gender makeup of the board, because that could influence their decisions. PRESENTER: And when you look at the financial services industry overall in this period, what have been the main changes? You touched on relevant life plans. RICHARD KATELEY: Relevant life is a big thing. Auto-enrolment, that’s been a big introduction, a big aid to these businesses to help them go and talk to financial advisers – a lot of them are out there needing advice. They’re seeking professional connections. Not always directly with a financial adviser, and that’s been an interesting one, because quite often auto-enrolments are done by payrolls or accountants. So advisers sometimes need to go and look at those two businesses rather than the actual company themselves. So if you go and talk to an accountant or you talk to a payroll company it can sometimes be an excellent place for leads, because they’re looking for support – because they can’t give advice on pensions and stuff; whereas a financial adviser can. And if you go and talk to a payroll company or an accountant, you might be able to put something in their newsletter to their companies talking about auto-enrolment, and also the importance of business protection. But as I say legislatively wise probably we haven’t seen a huge amount of changes. PRESENTER: How much more competitive is this market becoming in terms of product providers getting into the protection space? RICHARD KATELEY: There are, unfortunately I would say, because I’m Legal & General and I’d like all the business to come to us, more and more providers are getting into it, especially the relevant life plan. We’ve seen a lot more companies introduce a relevant life plan. A lot of companies now run business protection products, and let’s face it at the end of the day it is a term assurance or critical illness policy, so actually almost any provider could do it. But I don’t know that anybody goes into it as deeply as we do at L&G. PRESENTER: Well you mentioned auto-enrolment but why is that a positive if small businesses are now having to make bigger contributions? RICHARD KATELEY: Well the thing with auto-enrolment, and I think some advisers shy away from auto-enrolment, because if you’re setting up a small company on an auto-enrolment scheme it can be quite commercially challenging, because you can’t charge a bigger fee on a smaller business like that, because they can’t afford it. The way you can use auto-enrolment with business protection is actually use business protection to subsidise, a sprat to catch a mackerel if you like. So you’re not going to earn much out of doing the auto-enrolment scheme, but if you actually then talk to them about business protection, shareholder protection, key man, relevant life plan, you can actually build quite a nice product portfolio on the side of that to subsidise the work you’re doing with the auto-enrolment. So I think if you shy away from auto-enrolment just because of the commerciality I think you can use business protection as a really good way to boost that earnings. PRESENTER: Well I wanted to dive in a little bit more detail into some of the key protection areas. You looked at four main areas of protection in the survey. We’ve touched on debt that’s the most obvious one I guess. You said you’re seeing a big increase, loan protection and directors’ loan accounts in particular. What did you find there? RICHARD KATELEY: Interestingly, we’ve seen the actual overall loan amounts increase, so about 65% have some form of debt. In 2014, there was a big increase in the use of credit cards and director loan accounts. And when we first started the research the use of credit cards - this is loans over £50,000, so not small amounts, these are quite large sums - in 2009 it was just 3%. In 2014 that went up all the way to 23%, which is quite a high percentage of people with that sort of debt. This year it’s gone a little bit to about 19%. Director loan accounts very similarly we saw a big increase from about 15% up to around 30%. That’s again about 26% I think in this research. But what that’s telling me is the fact that they’re going down is they’re finding it easier to find commercial loans on the high street. However, because it’s still quite high, when you’re an adviser and you’re going to talk to a company, it’s best not to just say well what mortgages have you got? You need to ask what debt do you have, because they might not mention the credit card or the director loan account. One of the big problems we found with the director loan account is that over a quarter of them, about 26%, didn’t realise that a director loan account needs to be repaid on death. Now if I’ve loaned money to our, say you and I owned a business together and I lent £100,000 to that business, and I died, my wife’s going to want that money back fairly shortly. And so you’ve got to find that thing. So if they don’t realise there’s a risk there. And this is what we’re going back to this awareness, if they don’t know there’s a risk there then why are they going to protect themselves? So an adviser’s role really for me is to highlight that risk. PRESENTER: But when you looked at it did these businesses have an idea of how they would pay that money back? RICHARD KATELEY: Not all of them. Some of them did have protection. As we said earlier the advisers, the companies that had an adviser 84% had protected the debt that they had. But a good proportion didn’t. Some of them have secured it against their assets. Worryingly only about 30% secured it against their business assets. The rest of it was secured against personal guarantees, their own personal properties and things like that. So actually if there was anything to happen to them then they could be putting their personal family wealth at risk worryingly. What they could have done is used an insurance policy to secure those debts, but only about two out of 10 said that they actually used an insurance policy to protect the debt. So to me, no, I don’t think there is an awareness that they’ve thought it through with that debt. PRESENTER: Well let’s look at the second pillar, protection profit, key person protection. Talk us through the findings in a bit more detail. RICHARD KATELEY: Key person one is a really interesting one. We wanted to understand whether they realised how important they were to the business. And we wanted to first of all find out if they knew about their own personal insurance, because if they’re not going to insure their family they’re not going to insure themselves for the business. So that was a really key, and only about 30% of business owners actually had any form of insurance, personal, so a bit of work there. But even those people that did have insurance, it’s still not a closed door because relevant life plan might be a better option for them. But the biggest finding, and I hinted at it earlier, but 53% of the companies we spoke to said that if they lost a key person the business would not last a year, which I think is quite a stunning figure. PRESENTER: But how good are people at working out, particularly business owners, who the key people in their business are? RICHARD KATELEY: It’s not always that easy. I mean quite often you say to people who’s key in your business? They’ll say oh the person that brings in the most profit, but it’s not actually always the answer. If you take in our industry, if you take a sole financial adviser who has a power planner, so the adviser brings in all the profit because they go and see the client, they actually sell the business. And you look at those two people and say which one of those should I insure? Actually if the sales person dies the business is likely to fold anyway because it’s a sole trader. Actually if the power planner wasn’t there then the adviser’s going to have to come into the office, do more of the admin, therefore see less clients, that’s going to affect the cashflow of the business. So actually the key person in that situation may well be the power planner. So with every business don’t think it’s the most obvious person. It could theoretically be anybody in the business that has a direct or indirect responsibility towards the profits of that business. So it doesn’t necessarily have to be the key sales person or the managing director. PRESENTER: And when you talked to business did you say to them well what would you say are the biggest unforeseen risks in your business you want to take insurance out? RICHARD KATELEY: That was actually a question in the research, and it’s a little bit of a stupid question to ask because you’re asking a question what’s your biggest unforeseen risk? Because by theory it should be unforeseen. PRESENTER: It’s known unknown. RICHARD KATELEY: Exactly, and actually the most common ones were buildings being burned down, computers being hacked, loss of machinery or cars, and premises burning down, you know, those sort of things were the thing, and major contract loss was another one. All of those things you can tend to insure against. It wasn’t as obvious that people were mentioned. And actually within the research 39% of the businesses when they thought about it actually said actually losing our key person would be our biggest risk. So it truly is an unforeseen risk with a lot of businesses. And again that’s the job of the adviser to make sure that they go in and say actually have you thought about it? Because we quite often insure the things we touch feel and use, we don’t often think about the people that touch feel and use them, and those are the ones that are really difficult to replace. PRESENTER: Well let’s move on to ownership next, share protection, what’s the story? RICHARD KATELEY: The story there is a little bit more complex. Depending on the age of the business as to whether they’ve actually thought about share protection. It tends to be the older businesses that are thinking about it, because if you talk to a business owner later on in life then they’re thinking about their business as their pension. So the value of it and protecting it becomes more important. But in the research we found that just over half the businesses we spoke to don’t mention their shares in their will, or they don’t actually have a will in the first place. Which you might not think is a problem because the business owner if they die it’ll pass to their spouse, whether it’s the husband or wife. But actually if that’s the majority shareholding, and let’s say they both die together or they’re not married, that could lock the company, make it paralysed basically, because nobody would have a majority, because the majority would be sitting while probate is being sorted out. So the family haven’t been allocated, the shares, the company doesn’t have the shares so nobody has majority. Other things we found, a quarter of the business owners said that they expect their fellow shareholders would buy their shares if they died. Which is fair enough from the sound of it, they’ve thought it through. But actually have they? Where are they going to find that money? Have they thought how they’re going to do it? A lot of them in the research said they’re going to find it from their own personal wealth, but actually have they got access to that personal wealth? Have they got free equity in their house? So it becomes a little bit more complicated. They may say they’ve thought about it but actually have they? And quite often an easy way of doing it is asking if they have a disaster recovery plan. Most small business will, they’ll know what’s going to happen if the building burns down or cars get nicked or the computers crash. Ask them actually is the death of a shareholder within your disaster recovery plan? A lot of them will say no because they haven’t thought about it. And say well would you class a loss of a director as a disaster? Likelihood is they’re going to say yes, so why isn’t it in your plan? Let’s talk about it. PRESENTER: And to what extent is flexibility of action limited anyway because it depends on how the company or the partnership got set up in the first place? RICHARD KATELEY: Articles of association don’t tend to be reviewed very regularly. Quite often when we’re doing our workshops we ask company directors in the room if they know where their articles of association are, and then what’s in them. And very few financial advisers know where they are or what’s in them. We’ve found that a third of partnerships and limited companies haven’t reviewed their articles or their partnership agreements since they were set up. So quite often companies don’t actually know what’s in them. And one of the things advisers can do, they can download articles of association particularly, you can’t do it with a partnership agreement but with articles of association you can actually download them from Companies House. So actually you could go to these meetings and ask company directors do they know where their articles are, and when they say no say would you like a copy? It shows that you’re very professional; you’ve looked into their business in quite a lot of detail. PRESENTER: Now, in terms of the fourth pillar, family protection, you’ve mentioned relevant life plans a few times, is there much growth left in this market? RICHARD KATELEY: Yes, I think there is. I think there’s probably limitless growth in this marketplace almost. When we spoke to the business owners 70% of them had never heard of relevant life plans. So there’s still a massive market out there. We find that accountants aren’t talking about it to their clients. Obviously financial advisers haven’t yet gone in to talk to business owners about it. So there is a huge opportunity there. The other thing that might be a really good driver for relevant life plan is the fact it’s not a regulated pension scheme; whereas if you look at death in service schemes that some companies put in for their staff and the directors, they are quite often regulated pensions. So it’s going to affect their lifetime allowance. So if you die the sum assured is added to your pension pot; whereas with a relevant life plan that’s not the case. And therefore with reducing lifetime allowances and growing pension pots, then relevant life plan could take on a more important role. PRESENTER: Turning to advisers, how active are financial advisers in this business protection space, and what’s the attitude of SMEs towards financial advice? RICHARD KATELEY: First answer to the question is not very. Advisers, there’s not that many that are really seriously focused on this marketplace. It’s one of those products that they sell as and when they find a client that might fit the bill, which is a shame because I think there’s a huge opportunity. We do find that advisers, when they really embrace it and focus on it they really do have huge successes within it. And in the research it was very clear that because business owners don’t know about it, they’re not going to come and knock on a financial adviser’s door. So if an adviser wants to be active in this, they have to be proactive. They have to go out and talk to businesses, and really get under the skin of them. And there’s a lot of tools they can use to research companies before they go and see them. So they can download their accounts. They can download their articles of association. They can go onto the company’s websites and find lots of information for them. The second part of your question there is how do companies view financial advisers? And really interestingly the vast majority of them when we actually said to them how would you like to learn about protection and business finance is they gave the answer either my accountant or a financial adviser, and I think that was over 70% of the people we spoke to said one of those two. So actually they would probably quite welcome it. They don’t really understand the risks there. And we often say to advisers when we’re running a workshop is actually if you sent a letter to a company highlighting some of the risks that you think they’re running because you’ve downloaded their accounts and their articles, and you can see that they’ve got debts etc. The likelihood is if you’re an FD and you get a letter like that from a professional financial adviser saying I think you might be running some risks within your business, and I’d really love to come and chat to you about them. I can’t see the company saying no to that. Because if I was a finance director I would like to be told if I’m running risks that I wasn’t aware of. PRESENTER: As finance director you’d also think what are the costs of this? So again what sort of expectation do companies have of costs involved, and how close to reality are those? RICHARD KATELEY: Good question actually, because we do find the third biggest reason for not taking this sort of cover out is they thought it was going to be too expensive. And the really key thing is they use the word expect it to be too expensive. When you use the word expect it means you haven’t really looked into it, it’s a perception. So within this research we actually asked the question, because we wanted to get down to it and make sure that we were right. So we asked the people that we interviewed to give us a price on £100,000 life cover for 10 years for a 40-year-old, how much would it cost? And on average they came back and said it was three times more expensive than it actually was. So actually if you’re talking to a client the worst thing you can do is tell them how much it’s going to cost. If you take a mortgage for example, if you were coming to me for a mortgage and said right Mark, we’ve done your mortgage for £100,000, we’ll buy you some life assurance now. That’s going to be £50. You’re likely to say to me £50 is a bit more than I wanted to spend, it’s only life assurance. Whereas actually if I said to you Mark, how much do you think the life assurance is going to be, because you know you need to have it? You’re likely to say to me £150, because you think it’s three times as much. So when you then come in with the answer of £50 they think it’s quite cheap. So it’s the same figure but it’s just how you frame it. So the general view is that life assurance is much more expensive than it actually is. In reality it is fairly cheap. And don’t forget we’re talking about the corporate wallet here and not the personal wallet. So you’re not having to juggle whether you want that or Sky TV, it’s what the business is going to spend. PRESENTER: But presumably it also depends partly on the age of the people that you’re looking to insure. RICHARD KATELEY: Yes exactly, I mean you have to look at the age of the person, their health, the term of it etc. But on the general whole of it they think it’s going to be more expensive. PRESENTER: Now your research in total is suggesting that a lot of businesses seem to be quite unprepared, quite unaware in many ways of potential pitfalls, yet these are small businesses. These are people that are running their business day in day out. Surely nobody knows those businesses better than they do. RICHARD KATELEY: You’re quite right, and small business owners tend to be quite canny. But they’re canny in their own markets. They can predict their own markets, they’re experts in their own fields. But quite often when you’re so focused on running your own business, your field of vision is quite narrow. They don’t think about the obvious. Families don’t often think about what’s going to happen if one of them died. Let’s face it it’s not a common discussion around the dining room table what’s going to happen when you die, because we don’t like to admit we’re going to die. The same rule of thumb is right for a business. They don’t talk about death around the board table. They don’t think it’s going to happen to me, it’s that same old adage that it’s going to happen to somebody else, not me. So again the job of the adviser is to just come in with a new set of eyes and maybe look at risks that are slightly wider than the business has concentrated on because the concentration of the business is on actually their business, their nuts and bolts of what they’re doing. So the adviser’s power is to come in and say actually have you thought about these other things? PRESENTER: If you’re an adviser and you’d like to get more involved in this market and find out more, what should you do? RICHARD KATELEY: A few easy things. First of all look at your own business. If you haven’t, if you’re a director of your own business or a shareholder of your own business look into it, or a partner, if you work for a small business then think about it. Most financial advisers are SMEs in their own right, so have a look at your own business. That’s the easiest thing to do. Download our research, have a read of it because it shows some of the misconceptions out in the marketplace. It’s a very generic bit of documentation. It shows what businesses are thinking out there. We’ve also produced to help advisers a Rough Guide to Business Protection. Rough Guide do guides for all sorts of things, we’ve written one with them on business protection, which is aimed at using it with a client. So you can send that out to your client and let them read through it. It’s in plain English, it’s very simple, and it shows some of the risks they’re running. And then they could come on one of our courses that we run on a regular basis. But first and foremost is to actually have a hunger to go into that marketplace, go out and talk to people. You’ve got to be proactive. PRESENTER: Should you go to the companies themselves, or is this more about building alliances with solicitors, accountants and so forth? RICHARD KATELEY: I think a combination. If you already have solicitors and accountants onboard then great, go and talk to them and see if you can build up a relationship with them so that you can work with their clients, and they can work with yours. As I say go and look at your own client bank maybe to start with, look to your own business, look at your client bank, are there any clients in there that run their own businesses? If you’re a mortgage adviser then they’re going to put their occupation on the application form. So if they’ve put company director then hello there’s a business I can go and talk to. Failing that then there’s lots of tools out in the marketplace where you can go and find local businesses, and then just go and talk to them. I think there are so many ways for an adviser to do it it’s really down to their own style and their own area as to how they would actually go and do that. PRESENTER: And the SME market covers a huge range of businesses both size, age of business, how do you work out in that life cycle of businesses what’s the best one of these protection policies to approach a company about? RICHARD KATELEY: Good question, because a business does change and its protection needs will change. So if you look at a brand new business the likelihood is there’ll be no real value in that business. It’s probably going to be reliant on one or two people starting it up. So they are probably going to look at key man. So there’s probably very little point, if you go into that company and talk to them about share protection it’s probably going to be very irrelevant to them, so they’re not going to be interested. Whereas those guys, if you talk to them about losing a key person they could really resonate with that. When you get to the middle companies, companies that are maturing five to 10 years, that sort of age, they’re probably investing for their future. So debt is probably becoming more of a topic for discussion. So key person protection to cover the loans, they may still have some key people, and they may by that point already have built up some value. But I would probably say with those, I mean it’s a general rule of thumb but probably debt is a good one for those middle companies. And then as a company matures going to talk to the company directors about the value of their business, have they thought about what might happen if they unfortunately died before they got retirement, how would their family benefit from the company? They’re probably going to think actually yes share protection would be a better one. So age of a business is really quite key, so before you go and see them, and a lot of the stuff you can go onto their website and look at Companies House, will tell you how old the company is, you can make a rough rule of thumb, OK, perhaps I’m going to see a brand new company, I’m going to focus on key man to start with, and then see where the conversation leads. PRESENTER: We’ve been talking all through this about the report, how do you get hold of it, how can you use it with clients and prospective clients? RICHARD KATELEY: Very simply go onto our website, and there’s a whole page on there. You can download it. The Rough Guide is designed as an e-book as well, that’s on the same website. So download those. Within the website there’s all sorts of training material that we can give, there’s videos, there’s links to this particular video. So there’s lots of ways we can help. There’s our case studies, videos with business owners and clients, and there’s also links to our workshops and stuff that we do. So there’s so much help there for them, and download the report and use it and go and educate businesses. PRESENTER: We have to leave it there. Richard Kateley, thank you. RICHARD KATELEY: Pleasure.