Half of all financial advisers believe they hold the primary responsibility for improving financial literacy around life insurance, according to an adviser survey conducted on behalf of a major life insurer.
The survey, conducted by Lewers Research among 227 random life insurance advisers on behalf of Zurich Financial Services Australia, also found pro-advice messages from relatives, friends and colleagues carry much more weight than those provided by institutions and professional associations.
Zurich said the aim of the survey was to examine adviser attitudes towards consumer financial literacy and the role education played in the advice process.
In doing so the survey found 87% of respondent agreed that improved literacy had a positive impact on the reputation of the financial advice profession while 93.4% agreed that financially literate customers were “more likely to understand, value and accept” advice they were given.
Advisers also considered themselves as at the forefront of improving life insurance literacy with 49.8% stating they held the primary responsibility for that task while 46.3% stated the responsibility should be shared between advisers and life insurers.
The surveyed advisers also expressed scepticism around the ability of institutions and professional association to produce credible pro-advice messages with 56.4% stating consumers were more likely to trust messages from a relative, friend or colleague compared with messages from institutions (4%) and professional associations (3.1%).
Only 11.4% of respondents considered messages delivered by advisers themselves to be credible as where client testimonials which were rated as effective by only 4% of surveyed advisers.
Zurich, Head of Distribution for Life and Investments, Kristine Brooks said the research led to new questions around how to promote advice given that it found the most effective advocates of advice were existing customers with high levels of financial literacy.
“It does invite the question whether, in our quest to see more Australians access quality financial advice, we should be doing more to leverage the advocacy of the 20 percent who already use an adviser, rather than focussing primarily on the 80 percent who don’t,” Brooks said.
“It can be argued that, based on these finding, our industry should devote an equal amount of effort to making advocates of existing customers by helping them better understand the advice and underlying product solutions recommended to them.”
