As the life insurance industry continues its transition under the Life Insurance Framework remuneration reforms, respected industry contributor, Chris Unwin, says it’s becoming more critical than ever for advisers to deliver a quality advice experience for their clients, which in turn creates the perception of value in their mind.
His message in highlighting the critical importance of delivering value – and being seen to do so – is that this can open doors to new advice business model possibilities that don’t necessarily rely solely on commissions to be sustainable…

As we begin to move ever closer to a fee based remuneration model and away from a commission based remuneration model, it becomes more and more important that we are creating a quality experience for our clients rather than just completing transactions and ticking compliance boxes, thereby creating a perception of value on their part.

There are three crucial aspects of value:

  1. Creating Value
  2. Communicating Value
  3. Differentiating Your Value

Creating Value

There are many steps we can take in the initial advice process that add real value for our clients:

  • Positioning personal protection within the context of your client’s overall financial plan
  • Prepositioning a “wants analysis” as opposed to a needs analysis
  • Introducing up front the key concepts of long-term business relationships and regularity and continuity of service
  • Asking questions that facilitate our clients verbalising what financial outcomes they would want in specific ‘what if’ situations
  • Pre-application underwriting N.B. Managing clients’ expectations and painting the worst-case scenario
  • Presenting recommendations in a client friendly format
  • Educating your clients on the underwriting process and committing to facilitating and accelerating the process where possible
  • Being proactive not reactive during the underwriting process and keeping in regular contact with your client
  • Have a face to face meeting with every new client once policy documents are issued

Communicating Your Value

  • Most of the problems are in your head, not the client’s. You are already giving value – therefore any changes needed will be in your mindset rather than your process
  • Value” is perceived not specified. It is an awareness on the part of the client that comes with enjoying a quality experience rather than experiencing a transaction
  • Paying for quality advice will be an expectation of quality clients – therefore make it a question of which fee structure rather than whether a fee as early in the process as possible

Differentiating Your Value

  • Avoid using terminology that creates a negative perception – there are many words and phrases commonly used by advisers that create a negative perception and thereby enable potential clients to put up the shutters and say ”No”
  • Intergenerational Advice – we need to educate pre and post retirees that the biggest financial threat to their retirement nest egg is if one of their kids or grandkids were to suffer a major illness or injury without proper protection being in place
  • Level Premiums N.B. Trauma Cover – the key to your clients reaping the maximum potential benefit from their Trauma Cover is to ensure that they can continue the cover for the maximum possible period
  • Child Trauma Cover – should be sold not as an optional extra but as an automatic inclusion
  • “P Plater” Protection – a Trauma policy covers the five most common injuries sustained in car accidents. Therefore, how many parents of P Plate drivers would not want to convert their kids’ Child Trauma sum assured into Adult Trauma Cover if they knew this?
  • Overcoming the Price Barrier – the Percentage Concept. Don’t focus on the dollars and cents that your client’s personal protection package is costing; focus on the percentage it represents of the income they are securing – it will always sound like less

Chris Unwin is delivering a national roadshow series of ‘Value Proposition Workshops’ for advisers from late November – register now in your capital city for a bucketful of incredibly valuable client engagement tools in the risk advice space as well as 6 CPD points.


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