Advisers who specialise in risk insurance are more likely to change dealer groups in the next 12 months than their generalist peers, according to new research from Core Data.
The researcher’s annual dealer group report found that 22.1% of risk specialists said they were likely to switch licensees within the next year, compared to just 14% of generalist advisers.
Over half of the advisers who participated in the survey said they had been approached by one or more licensees in the previous 12 months, trying to entice them to switch. However, this may have little influence over an advisers’ decision to switch, with the majority saying if they were to leave in the next 12 months it would be to open their own AFSL (14.3%).
Over half of the advisers said they had been approached by one or more licensees in the previous 12 months
Remuneration was the number one factor likely to attract an adviser to a licensee, selected by 62.5% of all respondents. Product independence and compliance were also strong influencers.
When assessing the value of their dealer group, life insurance advisers placed slightly more importance on product independence than generalists (13.2% vs 9.9%), and gave less weight to technical services, including legislative updates (7.1% vs 10.4%). However, both risk specialists and generalists rated compliance support and remuneration as the most important attributes of a licensee.
Salvador Saiz, Head of Advice Wealth and Super at CoreData, said: “In the past, importance rankings for advisers have tended to centre around the price/service trade off – with the utility which can be derived from their licensee relationship coming down to how much advisers are able to earn from a service as compared to the amount of work they had to do to achieve the outcome.
“That’s now changed markedly and instead what we are increasingly seeing is advisers being attracted by businesses which are delivering great compliance support and have the systems and training programs to take the stress from advisers.”
As part of the research process, Core Data also announced its annual Licensee of the Year. Charter Financial took out top spot, followed by Fortnum Financial Advisers, and Commonwealth Financial Planning.
The Awards are based on the weighted satisfaction scores provided by advisers within each participating licensee network across 10 core categories with the Licensee of the year Award itself recognising best licensee in the industry who has achieved best result in satisfying its adviser network.
Nothing surprising in those results
FOFA, if left untouched, will cause genuine riskies to give away any investment product with ongoing fees – to much effort for bugger all money-and enter into relationship with a planner.
Ongoing training, and the current over-reaction incited by ASIC, will be reduced ( or should be reduced ) so it focuses on risk only and risk in personal super, but not investment in super. Lawyers for the instos are still in charge and over-interpreting the less than precise instructions from ASIC.
Trouble is the instos, and some larger independent dealerships, don’t, or wont, offer a risk only authorisation, because they are, still, hooked on the failed concept that our clients of all ages want to talk about super investment and retirement planning, whereas the reality is that is that less than 1% of clients under 50, or with kids on hand, will just go with the employer SGC.
Instos insisting that risk advisers do ALL the training, even though the adviser may be restricted in his advice by his choice, will be the driver of riskies to small AFSLs, which are relatively low maintenance compared to full advice AFSLs, particularly if there is just one, or two, advisers.
A one adviser/director AFSL makes their own rules ( within reason ) and buys in compliance-there are plenty of suppliers out there.
The other factor are those dealerships who apply a fat large monthly fee ( read $1500pm plus ) AND a 3% ( say ) split. These people are just leeches, providing little or no supprt to riskies, other than to pressure the adviser to flog the products of the parent life office/bank
As this mess continue’s to be “rolled out” advisers will look toward supplementing there income from risk products as it is obviously easier to do business with a reliable ongoing income source. My concern as with many others will be the inevitable change of servicing advisor letters that will flood the system merely to have the ongoing risk commission transferred, Personally i have been in the industry 35 years and believe there will be “fallout” in these changes that has not been seen prior to their implementation. There is no doubt the investors need a better deal. But the real winners here are the insurance Companies who will not have to payout ongoing fees particuarly if the legislation for opt in commences in its proposed form. What about discounts in group term life now that commission has been banned ? I think not !
Maybe a change of Government might see the light ? However even that is looking more and more unlikley !
What a mess !
Yes the industry is in a mess no thanks to the current government which is in a total mess. We all have to deal with uncertainty but we don’t know what is around the corner with all the vested interests out there.
The adviser is basically despised by the life companies and institutions and that is I suspect a bit of a mutual feeling. The trick is to find a reasonable Licensee who gives good basic support without being in your face, allows you to get on with it and has a fee/commission split commensurate with the service. I am amazed though that up to one in five advisers are thinking of changing as it is a costly, time consuming and disruptive process. As compliance costs go up though, it won’t matter who you are with, it will just make the advice business more and more difficult in a world of under insurance.
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