More Risk Advisers Seeing Light at the End of the Tunnel

Will risk specialist advice businesses survive into the future?

  • Yes (43%)
  • No (36%)
  • Not sure (21%)

Our latest poll results suggest more risk-focussed advisers are gradually coming to grips with the prospect of a brighter future for their advice proposition.

As we go to print, 42% of those voting in our latest poll believe risk specialist advice businesses will survive into the future. 37% disagree, while one in five (21%) aren’t sure.

While these numbers suggest significant uncertainty amongst the adviser community about the future for risk-focussed advice businesses, one of the intriguing outcomes from this poll so far rests in comparing these results with a similar question we posed in June this year (see: Jury Still Out on Furture for Risk Advice Specialists):

This Riskinfo Poll was run in June 2017...

This Riskinfo Poll was conducted in June 2017…

Fast forwarding to today (and acknowledging the lack of scientific rigour behind our poll results!) we sense that more advisers have done the hard yards when it comes to running the numbers for their business. While ‘only’ 42% agree risk specialist advice businesses will survive into the future, the trend appears to be heading in the right direction for those advocating the retention of risk-focussed advice businesses.

No conclusions can be drawn from this interim result, however, and there remains the distinct possibility that the days of risk-only or risk-focussed advice business – at least under their present structure, may be numbered.

Does this mean that we will be like the dinosaurs and become extinct or the rarer we become the more valued we will be?

Some salient peer comments we’ve received so far include:

“The focus will move far more to business clients as premiums of $5k or less simply wont be commercial for a practice to provide a service.”

“They will survive but in limited numbers and working harder for less income.”

“For those planning to enter this industry !? Don’t !!”

“The new reforms will only impact new start up risk businesses, as established businesses usually don’t have cash-flow issues.”

“Life insurance has been around for over 100 years and there will always continue to be a need for advice, particularly given Australia’s chronic underinsurance problem.”

“The opportunities in life-risk will be there absolutely, but don’t expect it to be a smooth ride.”

We also received this potentially insightful comment on the story that informed this poll (see: Risk Specialist Adviser Numbers Continue to Fall):

“Does this mean that we will be like the dinosaurs and become extinct or the rarer we become the more valued we will be?

Our poll remains open for another week, giving you time to add your own views to the debate on this question…

  • Squeaky_1

    “More Risk Advisers Seeing Light at the End of the Tunnel” – WOW, talk about a click-bait headline. Talk about the antithesis of the real world. Talk about a story someone should be ashamed to put their name to . . . oh, wait, they haven’t put their name to it! Probably smart not to. Even their very own statistics, shown in stark colour bar graphs on this page, contradict the headline. I should be used to this idiocy in our industry by now. When oh when is it going to be clear that the life companies are successfully on their way to rid the industry of life advisers? How many times must I shout this from the rooftops before the media gets it?! I am assuming they want the truth? Talk to some real advisers – you’ll get it! The more things change . . . .

  • Hank

    I have been an independent self employed risk focused adviser for 10 years and unfortunately cannot just hang up my boots because im too young. To survive in this industry as a Risk Adviser i have decided to make some changes to my business model.

    All clients will still be offered Full Advice for risk, however i will price this advice at $2,000 pa for smaller clients with premiums under $5k pa who actually need the advice most. These smaller clients will then be forced to my General Advice model which will no doubt leave them under insured and with little actual understanding of any of the policies they have purchased and no idea of any alternatives. It will be a price based decision.

    This is the only model under which small mum and dad clients can be assisted under the increased regulation and reduction of commissions (particularly the 2 yr claw back).

    How can i justify spending half a day per policy (minimum) on compliance (FF, knowing your client, comparing alternatives, SOA, BID etc) plus, 2 appointments assessing needs and coming up with a comprehensive and well suited insurance strategy when i have no guarantee of:
    1. The client accepting the risk advice and getting to application stage, I have to do an SOA before i even discuss any policies or their levels of cover (as this is advice)
    2. The policy getting through underwriting
    3. Retaining that revenue due to the 2 year claw back

    I see LIF as an opportunity if advisers level the playing field and use General Advice for Risk as the banks, insurers and super funds currently do. Under this model we no longer have to act in the best interests of clients (under general advice), we have way less pointless paperwork, we are much less likely to be held accountable by the bloodsucking lawyers, we can do the whole insurance sales process in the first appointment in under an hour and we get paid the same as if we did Risk Advice properly.

    I am sad that so many clients will suffer immensely from these necessary changes to our business models brought on by ASIC’s continual drive to limit advice to the top 10% of our population and leave the rest at the mercy of the banks and insurers……we all know how that will turn out.

    Congratulations ASIC. Goal achieved. You have enriched your lawyer friends who will soon be able to buy more beach side property with the proceeds of insurance claims as well as the the major share holders of our insurers (mostly companies outside Australia and not paying Australian taxes) at the expense of every average Australian with insurance needs.

    But thanks for leading by example and showing me the light at the end of the tunnel by forcing me to work under the same general advice model as the banks, direct insurers etc and put profits first and clients dead last.

    This will now be my response when a client goes to claim:

    I am sorry Mr and Mrs client. Your insurance policies are actually worthless as you declined to pay me the $2,000 to set something proper up. You did it yourself as you stated that you have the expertise, time and technical experience to assess your needs and the appropriateness of the terms in all the insurance policies available to you. Luckily you can sell your house and live with your in laws who live around the corner from centrelink.