- Disagree (59%)
- Agree (28%)
- Not sure (13%)
The majority of advisers think there are key factors other than a lack of infrastructure preventing more Australians accessing life insurance advice.
As we go to press, 56% of those voting in our latest poll disagree with the proposition that the lack of infrastructure is the now main stumbling block in the drive to deliver more life insurance advice to consumers. Around one in three (31%) support this contention, with the rest unsure at the moment.
The proposition that a lack of industry infrastructure is now the main driver preventing more Australians accessing risk advice is an extension of a point generally accepted at the recent AIA Australia Round Table event, at which it was mostly accepted that the current lack of infrastructure was the main reason preventing more new entrants into the advice sector. By extension, then, fewer new advisers entering the sector leads in turn to fewer Australians having access to much needed financial and life insurance advice.
As we note, however, the majority of Riskinfo readers disagree that the lack of infrastructure is the main cause for this dilemma.
For the 56% who disagree, what do you think is the main cause? Do you think the main challenge remains what many in the sector contend is unreasonable remuneration restrictions under the Life Insurance Framework reforms? Is it that the minimum education standards required to advise on life insurance are just too high? Or is it something else? If it’s a combination of factors, which is the most critical?
…upfront education requirements [for life insurance advice] are not fit for purpose
One Riskinfo reader offers this assessment as to what’s holding back adviser numbers and says it’s easy to understand:
In simple words, it has been made too hard and the upfront education requirements are not fit for purpose with most of the subject matter having no relevance to the work that will be done.
Make financial advice and risk advice completely different courses with differing education requirements and make it easier for existing advisers to incorporate risk advise and risk advisers into their practices.
Do you agree? Like many challenges facing the life insurance and life insurance advice sector, the answer usually rests in addressing and solving a series of interconnected issues, whether this relates to challenges such as product sustainability, advice practice commercial success or the number of Australians receiving life insurance advice.
As our poll remains open for another week we welcome your thoughts as to what you think is the main barrier to opening the floodgates that will allow more advisers deliver more life insurance advice to more Australians…
Anyone that's been advising for more than five minutes and has kept their eyes open eventually comes the conclusion that there are two completely different cultures in financial advice: those of us who provide specific life risk advice and those who seek to be "holistic"Or even restrict their advice to investment advice
I know of at least two practices that are primarily investment advice businesses who completely ignore the need to examine their clients life risk situations. They know their businesses are at risk, but they don't like the culture that surrounds life risk advice. They think it's dirty because it involves commissions.
Risk advisers on the other hand keep asking themselves why they have to be informed and educated to the same standard as investment advisers and maintain that standard with CPD on items such as COD's, Derivatives and other financial investment products. Our only questions to ask on those types of products are to establish the value of those products and whether or not that Value is hindered by a debt– We don't need to know how it works.
The facts are that those who choose to only advise on life risk should not be required to have the same formal training or maintain ongoing formal training on anything other than life risk advice. Unfortunately, such a move would not fit the ASIC business model because they like to throw all advisers into the one bucket and it makes it very easy enforce compliance and to to raise things like the ASIC levy and the CLSR levy. Different systems might even raise that nasty subject about why life risk only advisers should be subsidising Investment Product failures by being forced to contribute to the CSLR
Whether we like it or not, becoming a skill life risk advisor means developing a healthy curiosity and learning on the job and most of us understand we learn something new every day, despite our length of experience. You just can't get this stuff in some university degree. But when you are dealing with a regulator that Is staffed with failed lawyers, who never had to demonstarate client value to be paid, then that's a very difficult argument to run because they only believe in the value of pieces of paper.
So yes, I agree with the previous comments: Make financial advice and risk advice completely different courses with differing education requirements
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