General advice in life insurance is back in focus, with advisers at Riskinfocus 26 pointing to its potential to ease a growing affordability divide, a development drawing much reader interest this week…
The role of general advice in life insurance is growing with advisers taking part in a recent Riskinfocus 26 CPD Tour panel debate saying it has the potential to address a growing affordability divide.
Panellists at the Melbourne leg of the event agreed the cost of delivering risk advice is out of reach for many people, particularly the younger cohort.
Stefan D’Alessandro, Founder of The Risk Lab, has already included general advice as part of the mix to help those who might otherwise go without cover.
“There’s a demographic that’s been underserved,” he said. “General advice allows us to engage with them in a way that’s commercially viable.”
D’Alessandro also said many of his clients have a clear idea of what they want, having already carried out their own research, and take a more active role in decision-making.
However, he cautioned that operating in a general advice framework requires discipline, particularly in avoiding the inclusion of personal circumstances into recommendations.
“It’s more rigid than people think,” he said. “You have to be very clear [to clients] about what you can and can’t do.”
While supportive of the concept, other panellists highlighted the practical and philosophical challenges of adopting general advice within established advice businesses.
Nga Vu, a Financial Adviser at Lautum Life, sees a role for general advice, but conceded that shifting away from a personal advice mindset during client consultations can be difficult.
“When you’ve been operating in that [personal advice] framework for a long time, it’s not easy to change how you approach client interactions,” she said.
Vu said developing robust processes and clear boundaries would be critical for advisers considering the model, particularly from a compliance perspective.
Jamie McIntyre, Founder of Mac Financial, said while he does not see general advice forming part of his fee-for-service business model he accepts there’s a place for it.
“If it helps more people get insured, that’s a positive outcome,” he said.
Audience polling at the six Riskinfocus 26 events suggested attitudes are evolving, with a significant proportion of attendees indicating they are now open to insurance solutions being delivered under a general advice framework.
Pictured top: The adviser panel of (L-R) Jamie McIntyre, Nga Vu, and Stefan D’Alessandro discuss general advice at Riskinfocus 26 in Melbourne, led by moderator Dr Jeffrey Scott.
Not even sure why the "potential" is still being debated – regulation has created a large under-serviced group of people, AI has changed what people are looking for from advice, generational changes have impacted how people want to buy – all points to general advice, particularly those that offer cashbacks / rebates of commission, being a core part of the solution. And that doesn't take anything away from full personal advice.
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