Risk advisers need to become better at tailoring their services to meet specific client needs if they want to succeed in the future, new research has found.
‘The Advice Challenge’ white paper, produced by the Beddoes Institute on behalf of AIA Australia, sought to identify how advisers and insurers can deliver more value, by surveying current advice clients about what they valued most in their advice relationships.
The study identified three primary categories of advice clients, based on their needs:
- Value seekers (representing just over half of all advice clients)
- Personalised advice seekers (27%)
- Purists (14%)
According to the white paper, each category is driven by different needs, and these should be the focus for advisers when building a service offering. The paper says that by segmenting clients according to their needs, rather than delivering a one-size-fits-all service, advisers will see their clients’ loyalty increase. There are also efficiencies to be found in segmenting services, the paper notes.
Specifically, the research found that:
- Value seekers are driven by ‘significant value for money’. They want to know that the value of taking out insurance through an adviser outweighs the premiums or fees they pay, and that ‘advised insurance’ is better value than purchasing insurance through other channels. In addition, they want high quality communication to augment their perception of value.
- Personalised advice seekers want advice that is customised to their needs, circumstances, goals and objectives.
- Purists are looking for their adviser to help them develop a customised insurance plan, but in addition, they want ethical and independent advice and the assurance their adviser will manage an insurance claim should the need arise.
“Overall, the results indicate that advisers appear to be managing all clients uniformly and not addressing the specific needs of each client segment. By taking this approach, advisers are expending resources to delivering services that are not as valued by clients and missing an opportunity to focus on what matters most,” said AIA Australia Chief Retail Insurance Officer, Pina Sciarrone.
“The results of the research reveal that by effectively segmenting their clients, advisers may become more attuned to what each segment wants and provide a more valued service designed specifically to its needs. By meeting the stated need of each client segment, it’s also likely that adviser-client loyalty will increase for all segments,” she added.
After 3 decades and having done thousands of “AT THE COALFACE” research, talking to actual clients, I came to the conclusion that price was the predominant factor, which was still important once we spent the time discussing benefits and definitions, though we were able to swing clients back to quality once we had been given the opportunity to do our job.
The focus in any business or personal relationship, should be on sustainability.
The retail Life Industry has spent Billions over the years on well being, having emotionally balanced lives, providing coaching advice and being prodded from pillar to post.
I for one, would have preferred if that money could have gone into improving how we could actually do Business with the Life Companies, so our clients could directly benefit and our time and sanity could be improved that way.
I agree with your comments re the life offices and their efficiency/lack of efficiency.
We’ve had many comments on this forum, mostly about remuneration. It seems we’re going to have to ‘cop it sweet’ here. But one thing is certain, the life offices and their processing of applications hasn’t been given anywhere near the spotlight it should have.
In my view, the only way effective processing of applications is by the life offices having a bonus system in place with a view to getting more business in force quickly. The number of errors, misspelling, “lost” apps, and general uncaring exhibited by them is beyond the pale. This has been a tremendous cause of stress. If this situation had been given the focus that adviser remuneration has been, the life offices would now be crying ‘enough’!
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