Zurich Launches Adviser LIF Support Program

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Zurich Financial Services Australia will roll out five pillars of Life Insurance Framework (LIF) support for advisers stating each would represent practical ways to help advisers position themselves before the 1 July transition date.

Zurich's Head of Distribution, Retail Life & Investments, Kristine Brooks
Zurich’s Head of Distribution, Retail Life & Investments, Kristine Brooks

The insurer stated the five key areas being covered in its ‘Blueprints for the Future’ initiative covered product innovation, efficiency, business marketing and management, customer care and advocacy and best practice.

It also stated the Blueprints were developed following consultation with advisers in the second half of 2015 and reference to research from Zurich that indicated advisers were planning to expand their advice offering and were planning to improve efficiency by investing in technology and increasing their use of insurer provided services.

As a result of this Zurich would revamp its education offering into the Zurich Curriculum which would offer programs to assist advisers looking to broaden their advice offering or work with new client segments including professionals and high net worth clients, small businesses, and estate planning and SMSF clients.

The insurer would also offer a remuneration cash flow modeller to allow advisers to model the cash flow impact of the new LIF remuneration arrangements over the short to medium term.

These efforts would sit alongside a recent product overhaul with Zurich Life and Investments, Head of Distribution, Kristine Brooks the insurer’s partnership approach was necessary in adapting to and leveraging the LIF changes.

“The Blueprints represent all the practical ways advisers have told us they want to be supported,” Brooks said.

“For example, efficiency is a key focus for advisers right now, so we are concentrating on those technology based initiatives which can bring greater efficiency to all aspects of the advice value chain, including the initial client engagement and onboarding and ongoing client management, as well as the obvious areas like the new business and underwriting processes.”

“Adapting to change of this magnitude is no easy task, but with the support represented by our five Blueprints for the Future, we are confident we can help advisers create a framework that sees better advice, better advice businesses and better customer outcomes.”

Zurich will promote the Blueprints for the Future via a national roadshow starting in Perth this week and visiting mainland state capital cities.



7 COMMENTS

  1. Good so far. But there is no mention of assisting pure risk advisers to develop fee-for-advice structures No other insurer has done it either. And neither have Licencees
    You cannot help get the feeling that both insurers and AFSLs have their heads in the sand. Both it seems to me are running scared. Do insurers seriously think a number of existing pure risk advisers wont take the fee-only track; don’t they worry that the new lot with degrees and MBAs will be fee only if and when they start. Are insurers scared that if there is no commission paid to advisers ALL the admin work involved in keeping business on the books is their responsibility. Insurer costs must rise from that issue alone, to ruin the Frydenberg Fantasy of cheaper premiums. What a tangled web we weave when first we set out to deceive ( sorry Robbie )

    • Not sure who you are ‘Old Risky’ but hook me up, find me on LinkedIn, reach out some way. I’ve got lots of great ideas on this. Happy to have a chat and help you if i can. It can be done and guys/gals are doing it. Steve Salvia

  2. @steve Salvia,
    Just so I understand correctly how you think you’re going to help “old Risky” move to a fee for service model.
    If the maximum commission rebate remains at 30.0% then for every $1000 of premium income the client’s premium will reduce by $300.

    At a conservative estimate if you do the job properly it takes around 9 hours from initial interview/SOA/presentation & recommendation/ to completion & submission of a clean skin (Olympic athlete).
    At a suggested rate of $100 per hour if the premium was $2000 before commission and $1400 after the 30.0% rebate, I’m just wondering how you will convince a client to pay $1400 + $900 (fee for service) =$2300 for something that would have cost under the LIF regime $2000.
    And of course the real kicker for the adviser is that if he can get the client to pay the $900 then how much will he be better off by receiving $900 when under the present pre LIF system he would have received $$2200 (including GST) post LIF (2016) $1,760 and post 2018 LIF $400 (20.0% level).
    We obviously should disregard any fee for service in regard to claims because it’s unlikely most clients will not be able to afford the cost of an adviser spending up to 20 hours to assist with a claim.
    We should not factor in the cost of submitting those clients who are not prepared to or fail the insurance underwriting requirements and don’t complete at all.

    Afterall who’s going to spend more money than is owed on individual cases to chase unpaid fees in court.
    It sounds like a plan to me but not one that will allow survival of the independent risk adviser.

    • Well said Alleycat.
      Your question has been put forward on a number of occasions in past riskinfo articles. Although the figures may have been different, the principle has been the same – non commission will reduce a premium by 30% only, so the client (if they pay a fee for service) will ultimately be paying a greater price than under the current system (i.e. pre LIF). I have asked the various consultants who insist clients are “happy” to pay a fee to their adviser and an insurance premium, to back up their words with concrete evidence in risk info, but to date, none have!
      I wonder why?

  3. Unfortunately all of this is just company speak that won’t make a difference to advisers or clients with the damage already done by Zurich and the other insurers through the FSC. The simple fact is that Zurich and other insurers will be struggling for business in the not too distant future when Execs finally wake up to the reality that clients cannot afford their excessive premium increases and advisers cannot afford to write new business (a lose lose for the customer again).
    Watch how long it takes before the execs suddenly realise the only way they will survive in the future is to either try and compete in the direct space (higher costs of acquisition than the advisers they screwed) or cut premiums. And the only way this will be achieved is to cut out the excessive non essential costs (Execs, BDMs, bonuses and marketing “blueprints”).
    I agree with Old Risky that the insurers have their heads in the sand and if they are not running scared yet, they soon will be.

  4. @WB,
    It sounds like those who charge a fee either have a second job as a meat exporter (bull shipper) or their clients don’t know that they are paying more than they have to.

    Wouldn’t you like to walk behind every client they wrote and say, I can give you the same product from the same company and you will pay around 30.0% less based on an hourly rate of $100 per.
    I suspect it’s similar to a case where many years ago, I was being recruited by a large International Broking House as the NSW manager.
    They used to prepare their own Trust Deeds for SMSF and charged $14,000 for them.
    I know what needs to go into a Trust Deed but I’m not a lawyer with the capacity to prepare one I knew at the time I could get one off the shelf from a Master Trust for $200.

    The question I then asked was, how many of these have been bought and the answer was one (1) in the last 12 months since we started doing these.
    I suspect that those advocates of the fee for service model for Risk insurance don’t do much, which is why you probably haven’t had an answer to your question.

  5. I am totally amazed that the life companies are trying to convince everyone these LIF changes ( read debacle ) are a done deal and we should all just continue on with writing more business. I suggest everyone ask some questions about what has happened since the legislation was introduced into Parliament. A lot of advisers have spoken to a lot of liberal parliamentarians and maybe their party room will look into this whole mess a lot more closely via an “Economic Review Committee”. Sanity may yet prevail, the whole truth has yet to emerge, but it will eventually. Keep perservering, if you haven’t already done so, please sign the petition at http://www.licg.com.au. This show ain’t over yet !

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