Latest Poll – Insurers Owning Advice Networks

News of Zurich launching a new advice service has prompted our latest poll, which asks you to reflect on the question of product manufacturers owning distribution networks.

In recent times, the industry has witnessed ClearView Wealth divesting itself of its licensee firms (see: Centrepoint Alliance to Acquire ClearView Advice Businesses), while around the same time in 2021, AIA Australia announced the launch of AIA Financial Wellbeing.

Both insurers had their reasons for these contrary moves. For ClearView, as stated in its ASX announcement, selling its adviser networks to Centrepoint Alliance would allow the networks to participate in a new arrangement that would generate the scale required to deliver successful and profitable outcomes, while at the same time give effect to the separation of ClearView’s product manufacturer and financial advice arms.

From AIA Australia’s perspective, however, the insurer identified a need for the provision of advice services to Commonwealth Bank customers, citing the need to offer personal advice to customers of the bank with life insurance and simple wealth needs, especially considering the growing challenge facing lower to middle-income Australians in accessing affordable advice.

Similarly, Zurich’s recent announcement appears to be all about identifying a need and offering an advice service for ANZ bank customers who don’t fall into the category of high net wealth clients of ANZ Private Bank (see: Zurich Launches New Life Insurance Advice Business).

In launching new advice networks, neither AIA nor Zurich appear to have been motivated to set up a business that would directly compete with other advice networks such as Centrepoint Alliance or Synchron. Rather, both new advice businesses appear to have been created in order to offer a service to bank customers who may otherwise fall through the cracks when it comes to offering accessible and affordable financial advice.

Are you ok with this? Or do you think that there are no circumstances under which life insurance product manufacturers should own personal advice distribution networks.

Tell us what you think and we’ll continue the conversation next week…