Latest Poll – Use of APLs

How many risk product providers do you use on a regular basis in order to serve your clients' best interests?

  • 3 providers (38%)
  • More than 5 providers (27%)
  • 4 providers (15%)
  • 5 providers (14%)
  • 2 providers (5%)
  • 1 provider (1%)

Our latest poll asks you to declare how many different product providers you use on a regular basis.

ASIC Deputy Chair, Peter Kell – are APLs being used to best effect…?

This question stems from a recent statement made by ASIC Deputy Chair, Peter Kell,  in which he expressed some concerns about whether the the range of products on approved product lists is being used to maximum effect in serving the best interests of the consumer (see: APL Product Use Catches ASIC’s Attention).

One of the points made by the ASIC Deputy Chair to the Parliamentary Joint Committee into the Oversight of ASIC related to whether, even if the adviser had access to a broad range of products, they made choices from across the range of those products in a way that would be of benefit to the consumer.

While Kell made no reference to aligned or non-aligned licensee models, his possible implication was that some advisers used a quite narrow sub-set of product providers, even though they may have access to a broader selection.

There are many valid reasons why some advisers elect to restrict the number of their preferred providers and many valid reasons why other advisers prefer to utilise numerous providers  on a regular basis. Before we explore this question further, however, we’d like to commence with the more simple question about how many providers you use on a regular basis.

Let us know about why you choose to run with the few or with the many, and we’ll report back next week…

  • Alleycat

    These days, the lack of competition in the insurance industry is one reason why only a small number of insurers are used.
    In the 1990’s there were 57 life companies, now there are 9 and shrinking.
    In the 1990’s there were more than 378 products available through those 57 life companies, now look at how few are now available.
    How do you distinguish the merits of one company’s policy over another ?
    You need to be a GP to determine the benefits of one Trauma policy over another and then be a fortune teller to predict which event a client may satisfy over another.

    For most, the life premiums are within a couple of dollars of each other, so there is little differentiation.
    Most income protection policies are now contractually identical, with the same options available with one or two exceptions.
    Commissions are similar with most life companies, so that’s a non issue.

    So what makes an adviser with the benefit of choice decide one company over another ?
    Well being able to communicate with underwriters who have more than 2 years experience and are considered senior underwriters is a good start as opposed to those who after 2 years experience, think they know their trade.

    Secondly, dealing with a life company who’s history of paying claims is not shrouded by reports that reveal that in order to get a claim paid is not surrounded by stories of clients having to go to ACA, 60 minutes or a good lawyer to get paid, is a good start.

    I could name and shame those Life companies that fit the latter bill but in the interests of propriety, I will leave that issue for another day.

  • emkay

    Once again ASIC has no basic understanding of the issue. Aligned advisers forced to use their employers products only – BAD. Non-aligned advisers using say, 3 providers as those providers offer service, superior claims management and competitive pricing, only using others for a specific requirement – GOOD. There you go Kell, that should help you grasp what is going on. Also thanks to ASIC the tail and FSC the dog you once again are following the wrong scent.