Latest Poll – New World of Advice

10
What is the most significant change you will seek to implement in your risk-focused business in response to the New Life Insurance Framework?
  • Leave the industry (38%)
  • Increased focus on business efficiencies (22%)
  • Deliver more holistic, broader advice solutions (20%)
  • Not sure (8%)
  • Specialise in advising higher net worth clients (7%)
  • Other (5%)

Our latest poll looks ahead to a changing life insurance advice sector. We’re asking you to consider what changes you might make within your advice practice in the wake of the proposed commission reforms.

Before we commence, however, we note the New Life Insurance Framework exists only as a set of proposals, advanced as a compromise package by the AFA, FPA and FSC, which has been endorsed by the Assistant Treasurer. Many advisers have significant issues with one or more elements of the package. There is to be more debate, consultation and fine tuning before any of the proposed changes are implemented and riskinfo will continue to report on this critical issue and offer advisers the opportunity to be involved in the debate.

While the proposed reforms are yet to be ratified, we’re starting to report conversations that look beyond the proposed remuneration reforms to the potential opportunities that may exist for many advice practices. Our poll is ‘chanelling’ this emerging discussion, and seeks your feedback as you look to the future.

Elsewhere this week we’ve reported new research commissioned by Zurich, which revealed that an increased focus on efficiency was the single biggest change risk-focused advisers would make in addressing the new commission proposals. These efficiencies would be achieved in particular by better use of technology and the prospect of working within a more efficient compliance regime (see: Business Efficiency Key to Life Framework Success). This report forms the basis for our poll.

Does this focus on developing greater efficiencies accord with your own thoughts, or do you hold different views? Is it perhaps too early for you to start looking beyond the New Life Insurance Framework proposals?

For many advisers and advice practices, this is a very challenging period – one which may witness the departure of some or possibly many advisers from this fantastic industry. While we don’t yet know what the final outcome of this reform process will be, we’re keen for you to share your future perspectives…



RELATED ARTICLESMORE FROM AUTHOR

10 COMMENTS

  1. The problem with straw polls like this one is that there is often no single right answer. we will look at reducing costs as well as widening our offering, this in and of itself will see us then dealing with a more affluent client, deserting those we would normally consider important to our business. I suspect a ” Rank in order of merit” type poll may have a more telling statistic to work with

  2. There must be a total acceptance to increase efficiencies by all parties, not just adviser practices.

    At the end of the day, Advisers can be streamlined and honed to maximum efficiency, though it all falls down if the retail Life Companies are still struggling to update their systems and administration protocols, which delays and complicates our side of the equation.

    It should be that the Government asks the Life Companies to improve their systems first, then implement the reduction in adviser remuneration, as it defeats the purpose of better outcomes, if the people who actually introduce the clients and do most of the work ( US ) are unable to cover expenses, trying to work with outdated Life Company systems and then have to leave to pursue other areas of advice that actually pays the bills and can make a profit.

  3. I know how much work my office does for Life Offices. Seeing that the Life offices have been the main perpetrators and supporters of commission reductions they need to get their administration up to speed and take more responsibility and deal with client enquiries direct. A few years they tipped client enquiries out the door and Advisors took up the reigns.
    It astounds TAL is asking us what we are going to do when in my office experience TAL have the worst service standards in the industry.
    The survey should have come from AFA or Advisers across all Risk companies asking Risk Companies. Seeing that Risk Life Insurers are going to make a great deal more money please explain in detail what you are going to do save our businesses time and money yet enable Advisers make at least the same money if not more than we did pre Trowbridge.

    • I’m not sure how you came to the conclusion that TAL have the worst service standards. It does take a while to get through to them and they have horrible on hold music but at least when you do get through you get a straight answer and that person handles your problem. Maybe you haven’t ever dealt with AMP. I’m pretty sure that a requirement to work in their call centre is to have failed year 10 and their managers tell them that if they don’t know the answer to just make something up

  4. Interesting you say that the debate is ongoing and that the New Life Insurance Framework is only proposal, because I have received notification from all of the Insurers that we deal with informing us that they are implementing the “proposed” commission structure and claw back provisions as of the 1st of January 2016.
    The Insurance Companies have already decided that “The Framework” is how they want the future, and the advisers will just have to accept it.
    That’s like debating a speeding fine with a police officer after he/she has pulled you over and is writing the ticket.
    Efficiencies have nothing to do with this, the Insurance companies and there owners [the BANKS], are doing this to increase their profit margin at the expense of the adviser.

  5. Why should Advisers who now will be paid 50% less for the same work take up the Slack of the Life Companies and the Industries inefficiencies……….. Not our inefficiencies, oh I get it, we are inefficient now because we will be paid 50% less, I get it.

  6. I’m not sure if the point can be more clearly made in the poll completed by Riskinfo.
    So far 29% of advisers say they will be leaving the industry (29%!!).
    Another 10% are saying they are unsure what to do (i.e. they are not sure if they can afford to still write risk).
    Some are saying they will only concentrate on high net worth clients and a third are saying they will have an increased focus on business efficiencies.
    Yet the statistic being highlighted in the feedback is “the increased focus on business efficiencies”.
    The insurance companies, AFA, government etc seem to be burying their heads in the sand at this stage.
    If one third of advisers exit the industry and much of the rest have to concentrate on high net worth customers only to survive then the access to advice for every day Australians IS GOING TO BE WORSE, UNDERINSURANCE WILL BE WORSE. Non high net worth customers will be forced to buy direct and BE WORSE OFF.

  8. My mistake previously, now 32% saying they will leave the industry and the percentage is increasing!

  9. The options available on this poll do not have one important option.

    • Go work for a bank or insurer and cease to give independent quality advice

    This is what the purpose if the Trowbridge report always was. It is not about churn it was produced with the SOLE PURPOSE of eliminating competition from no aligned and independent advisers.

    Many young risk focused independent advisers will be forced to work for banks or the direct insurers. The older ones will just retire and let their clients go unserviced.

    Banks and direct insurers are already over priced and customers are forced to seek legal advice to be treated fairly at claim time. Everyone in the industry as well as the politicians know this however the politicians have vested interests in seeing the banks making more $ at the cost of the consumer.

Comments are closed.