Advisers have been generally united in shooting down the notion that Australian consumers may be open to the idea of paying fees for life insurance advice.
Our poll results to date and the comments we’ve received since launching the poll last week combine to effectively reject the finding or suggestion in recent research released by MetLife, which implied consumers were ready to consider different payment options for life insurance advice (see: Advisers Should Consider Multiple Remuneration Structures…).
The general mood of the meeting is that – for risk-focussed or risk-only advice propositions – 2020 reality does not accord with the research findings. One adviser appeared to summarise the opinion of many of his peers in reflecting on five new inquiries he has received since the commencement of the year about starting an insurance portfolio:
“…we explained what was involved and that they would need to pay a fee of $1,100 up front for us to provide them any advice.”
The adviser said all five prospective clients declined the offer “…and informed us that they were NOT prepared to pay any type of fee on top of the insurance premium.”
Another adviser’s comment noted that “...Showing someone what they have to pay in dollars is a whole different thing to simply asking for a fee with no numbers attached.”
Elsewhere, this comment sums up how the entire life insurance advice market has been traditionally structured, but which is now being severely tested:
“In my practice, I have always promoted that the commissions received covers my advice and assistance at claims times. It’s a pooled service, like the basics of insurance itself. Everyone pays for claims assistance, but not everyone needs it. When you do, I’ll be there and you won’t be charged anything over and above the premiums that you have paid.”
Where to from here? In terms of the debate around whether consumers would pay a fee for risk advice – or would even be open to the idea – we think current advisers have made their view abundantly clear. However, our poll remains open for another week if you’ve yet to make your voice heard…