Around two thirds of advisers have reported themselves as ready to conduct business under the Life Insurance Framework (LIF) changes with a similar number stating they will use a mixture of commissions and fee for service to charge for risk advice.
At the same time advisers are reporting they were receiving moderate to good assistance from industry associations and their licensees in preparing for the LIF according to research conducted by Zurich of 202 advisers.
The research, conducted by Lewers Research and conducted over the phone during October, found that 61.4% of advisers were ‘prepared’ or ‘totally prepared for LIF with 51.5% of advisers stating they have received moderate, good or excellent support from their industry association, with 36.1% claiming they had received poor or no support from the same.
Licensee were said to have provided moderate, good or excellent support for 69.8% of advisers will 24.8 said their licensee had provider poor support or no support in preparing for LIF.
Advisers also stated how they planned on charging for risk advice under the LIF model with 28.2% relying solely on commission, even when the upfront/ongoing model reduces to 60/20.
Around a third of advisers (35.1%) will supplement commissions with a fee but will do so over the three -year transition period while only three per cent said they would charge a fee for service only at any time over the next three years.
Advisers have also focused on improving what they already do, instead of breaking new ground in their preparation for LIF with 28.1% stating they had explored ways to be more efficient and 35.6% looked at better understanding the costs of providing advice.
Re-engineering process and new technology rated under 20% while making staff redundant and selling part or all of a risk book was considered by less than 10 per cent of advisers.
Zurich Life and Investments, Head of Distribution, Kristine Brooks, said advisers were examining every part of their business in preparation for LIF.
“This process will not only help advisers ‘future proof’ their practices, it will ultimately allow them to deliver better outcomes for their clients, as they turn to technology to not only drive more efficiency but to also deliver a customer experience which is more engaging, more consistent and more interactive,” Brooks said.
“The more customers understand and interact with the advice they have been given, the more likely they are to be advocates for that advice; that will ultimately be the most exciting outcome of the steps advisers are now taking.”