riskinfo

Our latest poll takes a break from FoFA-related issues and turns its attention to what advisers believe their clients expect them to deliver.  Based on our story this week about what American clients expect from their financial advisers, our latest poll question asks:

What is the most important attribute consumers are looking for when choosing their financial adviser?

The answer to this question for middle-income American consumers is possibly a surprise, where the most popular attribute they sought from their adviser was technical knowledge, ahead of characteristics such as trustworthiness and honesty, etc… (see: Top Ten Adviser Checklist for Meeting Client Expectations)

Do you believe the same also applies to Australian consumers?  What does your own experience tell you is the single most important attribute you believe your clients and prospective clients are seeking in you?  It’s not an easy question to answer because you can only select one of the options.

This question goes beyond the impact of any regulatory reforms because the answer you select should be the same answer irrespective of the rules under which financial advisers operate now or in the future.  It’s about what you believe your clients see in you.

Let us know and let your fellow advisers know what you think, and we will report back next week…

Financial Services Minister Bill Shorten has told advisers this week he is not convinced that a client opt-in process every two years will have a significant impact on the cost of running an advice business.

We would like your opinion on this issue, where we are asking:

To what extent will a two-year client opt-in process impose a financial burden on your advice practice?

A recent riskinfo poll addressed the question of whether opt-in measures themselves would reduce the cost of advice to consumers, but this poll addresses the cost of opt-in to the practice.

In speaking to advisers at an AFA function this week, Mr Shorten said that in all the discussions he has had with industry representative groups and individual advisers he has not been swayed by their argument that the administrative and associated financial costs of implementing and maintaining a two-year opt-in process will severely impact the profitability of advice businesses.  He said he has listened to concerns that have been raised and has compromised by extending the opt-in requirement out from one to two years.

Mr Shorten said he is taking a pragmatic approach to opt-in and is “… keen to continue a close dialogue with industry to ensure that to the greatest extent possible, opt-in can fit in with the existing advice process and that the compliance regime is not heavy-handed.”

He also told media that some advisers had approached him after his speech, telling him they could ‘live’ witha two-year opt-in process.

Is this the case with your own practice?  Do you accept Minister Shorten’s contention that opt-in requirements will pose no serious threat to business profitability? Or do you hold that opt-in measures will indeed be found to have a significant cost impact on your bottom line?

Mr Shorten has indicated he continues to listen to the industry and we encourage you to offer your constructive comments on this issue, where it is not too late for your voice to be heard…

The Industry Super Network contends client opt-in measures will reduce advice fees for consumers. Do you agree?

Our latest poll question asks:

Read More »

The most contentious outcome from last week’s Future of Financial Advice reform announcement was the Government’s decision to ban risk commissions inside superannuation.

There are so many issues and questions associated with this move, such as whether most consumers will in future be able to afford superannuation risk advice.  We will monitor and report on all these questions.

But today we are asking what impact, if any, will the banning of risk commissions in super have on how advisers will deal with insurance claims against those policies.  Our question is:

Will you be forced to charge a fee to service your clients’ insurance claims for superannuation risk policies written after 1 July 2013?

Responding to the banning of risk commissions in super from 2013, one adviser has commented to riskinfo:

“I have paid claims to a number of average Australians over the past few years and not one of them complained about commissions rather the great assistance my office gave them and their families.”

But will this ‘great assistance’ only be possible in future if the super insurance client pays a fee in return for the support from the adviser and his/her staff?

In previous poll comments, advisers have said they will stand by their clients in their time of need regardless of whether they will have received commissions on their policies.  Is this now still the case?

Will advisers write their clients’ insurance outside super because they will simply be unable to afford to serve their clients’ needs at claim time unless they are forced to charge a direct fee?  Does this represent a new conflict of interest?

Will some advisers contemplate agreeing with the client to charge a small percentage of the claim amount as one way of overcoming the client needing to pay a fee out of their own pocket for the adviser’s time and effort?  But what if the claim is rejected?

So many questions!

Tell us what you think.  Tell us about the answers you can envisage for your own business.  We ask that your comments focus on solutions!…

One of the issues stemming from last week’s announcement of the Female Excellence in Advice Award forms the basis for our latest riskinfo poll question, which asks:

Would the introduction of more female risk advisers have a meaningful positive impact on Australia’s underinsurance crisis?

This question relates to underinsurance and gender inequality in the financial services sector.  While the Female Excellence in Advice Award is one that spans the full range of advice solutions, our poll is considering the impact of more female advisers on the life insurance sector.

…women prefer to speak with other women about their investment and insurance needs

In originally launching the Award, its Patron and former NSW Opposition Leader, Kerry Chikarovski, reflected on the lack of numbers of female advisers in the financial services industry, but observed that it was a fact of life that women prefer to speak with other women about their investment and insurance needs.

Speaking to riskinfo at the MLC Risk Specialist Network Risk Retreat, Adelaide-based adviser Sim Sinesi said she supports the notion that women do like dealing with other women, but suggested one reason the life insurance and broader financial services industry has historically not been attractive to women as a career relates to its remuneration structures.  Ms Sinesi added, however, that as the industry evolves towards a more ‘professional’ model, the greater certainty or guarantee of income may have a positive impact on more women adopting a career in financial advice.

But irrespective of whether women prefer to speak with other women about their investment and insurance needs, the fact remains that female consumers are often not given a choice to deal with a female adviser, given the overall lack of numbers of female advisers in the industry today.

If this is the case, then surely an injection of more female financial advisers who include risk advice as part of their services would have a meaningful impact on underinsurance.

Is this a solid contention, or is it simply a good theory that won’t work in practice?  Would new female advisers be confronted by the same issues facing existing male and female advisers when it comes to the fact that insurance is a solution that is sold and not bought?

Even so, would not the introduction of more financial advisers and more female financial advisers in particular, be a good thing for the life insurance industry in addressing the underinsurance dilemma, particularly amongst female consumers?

And why does there remain such a gender imbalance in the financial advice sector?  Why, in 2011, does such a gap still exist between male and female adviser numbers?

Let us know what you think…