October 3, 2017
Will risk specialist advice businesses survive into the future?
- Yes (43%)
- No (36%)
- Not sure (21%)
Our latest poll asks a difficult question about the future for risk specialist advice businesses.
According to research firm, Investment Trends, the proportion of risk specialist advice businesses, amongst those practices which deliver life insurance advice solutions, has dropped to 17% in 2017; down from 41% in 2012 (see: Risk Specialist Adviser Numbers Continue to Fall).
This fall represents a significant reduction in the number of risk only or risk-focussed advice businesses operating in Australia, and the remuneration restrictions accompanying the implementation of the Life Insurance Framework reforms have not yet even commenced.
Will the LIF remuneration reforms contribute to or even accelerate this downward trend in the number of risk specialist advice businesses?
There’s no question that the commercial structure of many risk specialist advice businesses will start to change from 1 January 2018 when upfront commissions will no longer be available. But to what extent will this spell the end for those businesses still operating on the upfront commission model?
Risk specialist adviser, Mark Rando, sees a bright future for his business after 1 January and also for the continuation of risk specialist businesses everywhere – but not under the same commercial construct (see: There’s Life After January 1, But Not As We Know It).
We asked you almost exactly the same question only a few months ago (The Uncertain Future for Specialist Risk Advisers). That poll in June, however, was entirely about the LIF reforms, while today’s poll expands our discussion to the downward trend in the incidence of risk-only or risk specialis advice businesses that is already and clearly in evidence.
How do you explain the trend that already exists? Investment Trends suggests it is due, at least in part, to the broader evolution of advisers’ practices following the Future of Financial Advice (FoFA) reforms.
There’s plenty more we could say, and other arguments we could present. But it’s time to hand the discussion over to you and we’ll continue the conversation next week…