November 14, 2017
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%)
The majority of advisers use either three product providers on a regular basis or more than five, in what appears to be a curious result in our latest poll.
As we go to print, the most popular response to our question about how many product providers are used by advisers on a regular basis in order to meet their clients’ best interests is three (31%), very closely followed by more than five (30%).
The next most used options are either four or five providers (15% and 16% respectively).
Attempting to interpret the 61% who use either three or more than five providers, we might speculate they comprise a combination of holistic and risk specialists as well as aligned or ‘non-aligned’ advisers (see also: ASIC Calls Time on ‘Independent’ Advice).
Only the minority of those voting in our poll use one or two providers in order to meet their clients’ best interests, and we again speculate that the majority of these advisers deliver the broader spectrum of advice solutions and do not represent risk-only or risk-focussed business propositions.
One reason for restricting the panel of providers relates… to familiarity, relationships and reputation
As we indicated last week, there are many valid reasons why some advisers elect to restrict the number of their preferred providers and many valid reasons why others prefer to utilise numerous providers on a regular basis. One reason for restricting the panel of providers relates not just to licensee ownership, but also to familiarity, relationships and reputation, especially relating to the provider’s propensity to pay claims and the quality of their new business and underwriting processes and services.
Feedback to date suggests ‘non-aligned’ advisers may use only three providers, but mostly for the reasons stated above, while other feedback emphasises the importance of capable underwriters.
We welcome your vote if you have yet to do so and also any contributions you may wish to add to this question, which initially stems from ASIC’s questioning of whether the range of products on approved product lists is being utilised to maximum effect (see: APL Product Use Catches ASIC’s Attention).
Our poll remains open for another week and we welcome your views.