- Agree (77%)
- Disagree (22%)
- Not sure (1%)
Our latest poll stems from one of the presentations made at this week’s inaugural FAAA Congress, at which advisers were presented with a diverse array of findings and other information that can be utilised when having ‘life insurance’ or ‘wealth protection’ conversations with their clients.
While appreciating that life insurance advice is often regarded as one of the more problematic areas of financial advice – an area avoided by many advisers due to the complex and changing nature of the underlying product solutions available, Zurich’s Adam Crabbe outlined a number of different elements in his presentation that he says any adviser can embrace as a way to conduct ‘life insurance’ conversations without necessarily having to be an expert in the field (see: Latest Claims Insights Highlight Imperatives For Risk Advice Conversations).
There are many in the adviser community who raise the life insurance narrative with their clients, and then refer their them to an experienced colleague in their business or to a trusted referral partner to deliver the appropriate product solution. There are others, however, who simply don’t raise the topic in the first place or only pay lip service to this critical element of advice.
Crabbe says every adviser, regardless of their expertise in risk, has the opportunity to utilise one or more of the elements he outlined in his presentation in order to raise or reinforce whichever risk protection conversation is appropriate for their client.
…it seems entirely logical to suggest that all advisers should raise the topic of life insurance with every client whose circumstances merit such a conversation
On the surface, then, it seems entirely logical to suggest that all advisers should raise the topic of life insurance with every client whose circumstances merit such a conversation which is in their best interests. The adviser doesn’t need to personally execute a solution if they lack confidence or expertise, goes the argument, but as long as the client receives that advice from a trusted colleague, then their needs and best interests have been addressed and served.
Do you agree with the thread of this argument? Or do you think we’re being naive? While Riskinfo supports the notion of more advisers delivering more risk advice to more Australians as one way to contribute to addressing the worsening underinsurance dilemma, we’re keen to know your own view on the proposition that ALL advisers should address this issue with their clients, based on their needs.
Tell us what you think and we’ll report back next week…
If an adviser (choose a label: investment planner/financial planner/financial adviser) identifies a need for life, TPD, trauma or death cover then he has a duty of care to discuss this with the client. This is true even if the ‘adviser’ considers him/her self as an investment planner or whatever, just because they may not describe themselves as a ‘risk adviser’ does not preclude them from having such a discussion and recommending cover – if appropriate to the situation.
Sadly, some ‘investment advisers/financial planners/financial advisers’ and other labels people give to themselves, still see themselves in some bizarre way as above the need to offer risk advice, believe it or not. I know some advisers who think this way. If an adviser identifies a clear need for risk protection but sees it as to messy or inconvenient to recommend and implement risk cover then that adviser is negligent and does not have the client’s best interest at heart. Simple.
Placing investments only for clients without proper cover in place for emergency or tragedy is like building Centrepoint Tower on the sands of Bondi beach – no foundation or backstop whatsoever. The adviser is shortchanging the client, not to mention leaving themselves wide open to legal action if the worst does happen to the client. I see risk advice as so important I chose to specialize in it decades ago when I saw many other advisers steer clear of it for the more supposedly ‘glamorous’ area of investment advice.
A financial plan needs a Good Solid Base which includes income protection, life insurance and critical illness/trauma insurance.
If investments are done first, with No Solid Base, ie, no insurances in place, a sickness/accident/trauma/death at the wrong time will cripple a financial plan.
Today we live in a very litigious society, and If insurances are not brought up/discussed during the needs analysis, the advisers could be leaving themselves open to be sued by the client or beneficiary, if the client suffers a trauma, has a sickness/accident or in a worst case scenario, dies. Why would one take that risk?
As financial advisers we need to do the best job by asking the right questions from the start, so we get the right answers, to enable us to do a good financial plan for the client.
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