October 15, 2019
Research released by the Beddoes Institute has found that over 63 percent of advisers believe the Banking Royal Commission has impacted both new business activity and their existing client base.
This finding was obtained through the latest Beddoes’ Adviser Experience Study. This annual study has been helping insurers better support advisers for over ten years, and this year it is also exploring the ramifications of the Royal Commission on advisers and insurers.
According to Dr Rebecca Sheils, Director at Beddoes Institute, the repercussions of the Royal Commission on advisers and subsequently insurers are numerous, with several particular concerns shared by the majority of adviser respondents.
…advisers have been, and continue to be, adversely affected by the Royal Commission
“Based on the data we’ve collected to date, it is clear that advisers have been, and continue to be, adversely affected by the Royal Commission,” said Dr Sheils, who noted the responses indicate that compliance and regulatory obligations are now too onerous, and that market sentiment is more sceptical and less trustful: “These are just some of the factors that are not only affecting the adviser’s propensity to write insurance but also the overall profitability of their business,” she said.
Beddoes Institute says its findings clearly demonstrate that advisers are less likely to write new insurance business due to the increased resources needed to fulfil what are perceived to be excessive compliance requirements. Its feedback reveals that this regulatory burden makes it more costly and time consuming to write new business, whilst increased premiums make client retention more difficult.
Further compounding the issues advisers face are the findings by Beddoes Institute that it says clearly illustrate a changed market landscape. According to the data analysis consulting firm, consumers are now more cynical of advisers and hesitant to trust them. As a consequence, it says advisers are spending more time justifying their advice, recommendations and fees to new and existing clients.
…the most worrying impact …is the issue of affordability around advice and insurance for Australians in general
“With our findings to date, it is clear that the fallout of the Royal Commission is detrimental to advisers and the industry overall. This is not only reflected in the adviser feedback we’ve gathered but also from our analysis that reveals adviser numbers are declining by approximately 15 per day in 2019,” said Dr Sheils.
“But the most worrying impact uncovered by our study is the issue of affordability around advice and insurance for Australians in general,” she added, concluding:
“The combination of the extensive regulatory and administrative workload, increased premiums, general distrust of advisers and associated risks to advice businesses means that less advisers are willing to take on clients with lower margins or those that are simply not commercially viable given the increased cost of doing business.”
Have your say on how the Royal Commission has impacted your business by completing Beddoes’ Adviser Experience Study. This Study has been in the market for 10 years and has supported insurers by providing adviser feedback on the services they offer to support you as a business, as well as your clients throughout the life of their policy. And this year we’re also examining the impact of the Royal Commission. This Study also underpins the Client Service Team Awards (Claims, BDM and Underwriting Teams of the Year) that are part of the AFA Life Company of the Year Awards suite, as well as the inaugural Most Valued BDM of the Year Award. Simply complete the survey to receive access to over $3000 worth of business resources and potential eligibility to join Beddoes’ Most Trusted Advisers (MTA) Network, which is aimed at restoring trust and confidence in the advice sector.
Click here to learn more and register: