The AFA’s 2015 Life Insurance Roadshow series has been preparing advisers for the inevitable, and at times confronting, transition to a significantly different risk advice future.<\/p>\n
Presented to packed adviser audiences around the country under the theme of ‘Facing into Transition’, this Roadshow was added to the AFA’s schedule following the release of the new Life Insurance Framework proposals, which in turn were initiated in response to ASIC’s 2014 Review of Retail Life Insurance Advice and the resulting Trowbridge Reform Model recommendations.<\/p>\n
In a future advice environment in which proposed changes include cutting the maximum upfront commission level by 50 per cent, and extending the responsibility period for new policies from one to three years, adviser audiences are being taken on a journey that positions the changes within the prevailing political climate, but where strategies and potential solutions are being offered.<\/p>\n
At this week’s Melbourne Roadshow, AFA CEO, Brad Fox<\/strong>, set the scene for advisers by summarising a timeline of events that has led to the current period of ‘disruption’. Some of Mr Fox’s observations included:<\/p>\n Organisational Psychologist, David Peake<\/strong>, spoke to his audience about coping with change. He explored the types of responses typically associated with change, from early adopters to more negative approaches, and from positive acceptance to total denial. He noted that true change always starts from the inside and works its way out. He talked about why people resist change and how to identify and remove the barriers.<\/p>\n Elixir Consulting’s Sue Viskovic<\/strong> then shared with advisers the latest findings she has compiled that serve as examples of how both holistic and risk-focused advice practices can structure their businesses to include advice fees in their remuneration models for life insurance advice. Ms Viskovic broke down all the elements usually involved in delivering a life insurance advice solution, and applied average time and cost amounts to those processes in order to arrive at a typical ‘cost of advice’ scenario.<\/p>\n The next message in this logical sequence of presentations, which commenced with setting the scene, followed by consideration of coping mechanisms for impending change and a robust and honest assessment of current trends in cash flow and alternative remuneration strategies, was a discussion of both theoretical and practical advice scenarios by two highly successful advisers in Russell Collins<\/strong> and PJ Byrne<\/strong>.<\/p>\n Mr Collins emphasised the critical role played by the advice process in negating the impact of a three-year clawback provision, which can significantly reduce or even eliminate lapses within the first three years. He told his audience this could be achieved by structuring an advice process in which the client was the effective decision-maker within parameters set by themselves. He spoke of delivering an advice process that will make advisers proud of their persistency rates, rather than concerned about their lapse rates.<\/p>\n Meanwhile, PJ Byrne shared his own, sometimes difficult journey in transitioning from upfront to hybrid commissions and then introducing advice fees into his risk-only advice business. He noted one very successful method he uses for minimising lapses involves asking the client and his\/her partner, if appropriate to sign a document acknowledging their decision to cancel the life insurance contract, thereby transferring full responsibility for the decision to the client.<\/p>\n A panel discussion completed the half-day event, during which the presenters as well as life company senior managers responded to adviser questions from the floor.<\/p>\n This roadshow presentation by the AFA succeeded in facing and addressing the key issues for advisers stemming from the new Life Insurance Framework proposals, and offered a pathway for risk-focused advisers to assist them with the transition to a new advice environment which will commence from 1 January 2016.<\/p>\n","protected":false},"excerpt":{"rendered":" The AFA’s 2015 Life Insurance Roadshow series has been preparing advisers for the inevitable, and at times confronting, transition to a significantly different risk advice future.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[282,8,241,3,270],"tags":[],"class_list":["post-30743","post","type-post","status-publish","format-standard","category-associations","category-compliance-regulation","category-conferences-and-events","category-general","category-remuneration"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/30743","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=30743"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/30743\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=30743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=30743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=30743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The AFA is seeking commitment form insurers to guarantee no premium increases during the first three years…<\/h6>\n
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