Mixed Views on Insurers Delivering Limited Advice

The results of our latest poll suggest a majority of advisers is pushing-back on the question of whether life companies might provide limited advice services to their policy holders in future.

This conversation has a link to one of the Quality of Advice Review recommendations put forward by Michelle Levy and debated at the recent MetLife Round Table, at which a cross section of industry stakeholders that included advisers, associations, licensees and insurers either supported or had no real concerns with the prospect of life companies delivering limited advice to their policy holders.

One of the underlying threads to Levy’s recommendation rests in her comment in the QoA Review Final Report that:

Some personal advice does not need the skills, expertise and judgment of a financial adviser…

“Some personal advice does not need the skills, expertise and judgment of a financial adviser and should be able to be provided by other people (and entities).”

While the MetLife Round Table industry panel was generally supportive of such a move, perhaps many of the 63% currently voting against this proposition have their position reflected in this comment from one of our readers, who observed:

“Do we really want product manufacturers interfering in our relationship with OUR clients.”

While this comment represents a not unreasonable perspective, it may be balanced by an alternative argument put by CALI chief, Christine Cupitt, who suggests mutual benefits would flow from such a move.

…customers who receive some level of advice from a life insurer will develop a greater familiarity and confidence with the advice process

Taken from the story we released earlier this month on this issue (see: Support for Insurers to Deliver Limited Personal Advice), Cupitt said the proposition ticks the box around a shared interest in making sure that consumers have the right level of life insurance protection “…and it also means that customers who receive some level of advice from a life insurer will develop a greater familiarity and confidence with the advice process ahead of potentially taking the next step to obtain a holistic financial plan if that’s what suits their circumstances.”

Perhaps then, the justification for, and validity of, a life company providing limited advice to policy holders may be informed – at least to an extent – by the strength of the ties (or lack of them) that exist between the adviser and the client.

That’s enough from us for the time being. We’ll monitor and report any future developments on this proposition as our poll remains open for one more week…