LIF – Have You Changed Your Business Model?

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Have you made changes to your advice business model to accommodate the remuneration changes contained in the Life Insurance Framework reforms?
  • Yes (40%)
  • No, I won't be making any changes (32%)
  • No, but I'm still considering possible changes (28%)

Our latest poll follows up on the 53% of advisers who said, eight months ago, they would be changing their business model because of the Life Insurance Framework reforms.

Have you now made those changes?

Back in March this year, one third of advisers voting in the same poll (33%) indicated they would not be changing their model, possibly because they were already operating a robust, future-proof business model or didn’t write much life insurance business. At the time, a reasonably significant number (14%) weren’t sure. So we’re asking, as 2017 draws quickly to a close, whether you’ve made progress.

In our March poll, one adviser noted he was considering changes to his business; one option being retirement, while another suggestion was that advisers should build a claims-handling fee into their client contracts.

Elsewhere, a risk-focused adviser noted the combined 47% in that poll who did not answer ‘yes’ must not have read the question correctly, implying he believed all risk-focussed advisers (at the very least) would be compelled to make changes because of the LIF reforms.

The clock is ticking as the industry counts down to 1 January 2018, and we welcome your comments about where you stand today in relation to your business model and the looming remuneration restrictions accompanying the three-year LIF transition period. Have you now made those changes…?



3 COMMENTS

  1. We at AFRM Claims Advocacy have had advisers speak to us about outsourcing their claims management to us. Given the pressures on cost to serve, it alleviates this pressure and creates an opportunity to free up practice capacity.

  2. It can be difficult to make adjustments and changes to a Business to suit the new regulations, when the goal posts are going to be moved anyway.

    Where the goal posts end up, is like looking into a crystal ball and guessing the result.

    The only constant, is the Big end of town always looking to maximise their profits.

    What this means, is they will manipulate all and sundry to, if necessary, make up stories similar to the churn fiasco, to get what they want.

    The one thing they cannot manipulate, is falling revenues and profits if advisers decide the cost and risk is too high to work in the Life Insurance space and they then stop writing New Business.

    Business is and has always been cyclical.

    The Life Companies and Banks have been caught bending the truth and are looking to shore up their defense by fighting expensive legal rearguard actions, rather than accepting their culpability and fixing the mess they created.

    When the wheel turns and it always does, the Big end of town will do what they always do and look at historical data, realise they have stuffed up, ( though never admit it ) and then lobby the Government to make it easier to write New Business, due to the economic circumstances of the day.

    The world has gone from REAL LEADERS, with Real experiance, leading their Companies, to organisations run by Legal eagles and accountants, who quite frankly do not have the practical experiance to know the Business they are in.

    Instead, they hide behind a wall of complex legal terminology and yes men, whose job it is to be the best spin doctors and put forth incomprehensible jargon that does not pass the common sense, or plain English Truth test.

    Though do not despair, this world we live in now, has been around in a similar format for many decades and the trick is to survive the stupid actions of stupid or biased entities and bureaucrats, ride out the storm and reap the rewards when the next NEW Service Offering arrives to stimulate growth.

    Common sense is a rare commodity in large Corporations and many only respond as a reactive action to negative news, which would have been avoidable if they had listened to real people with real experience, instead of listening to Lawyers, whose sole purpose in life is to cloud the real issues.

  3. I answered yes to this survey but that is because we are discontinuing writing risk new business and concentrating on other business. I wonder how many of the yes votes are in the same mindset. Writing new risk business will be unprofitable and even those that concentrate in this area will be better off just sitting on trails for a few more years then getting out.

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