The latest life insurer survey published by Roy Morgan doesn’t paint a good picture for advisers.
How could a client who purchased their insurance direct be a quotable comparison to having dealt with and purchased through a broker or adviser? Did they actually experience both to be able to provide the specific judgment?
That factor alone says these results are questionable.
I would hazard a guess that some contributing factors to satisfaction would be having been able to complete the process themselves over the phone which would have given them a sense of personal achievement. They didn’t need an adviser and probably got a better deal because they’re not paying commissions.
There was also the comfort factor of conducting an exchange over the phone rather than face to face. Sitting with an adviser who probes for more detail, to make sure nothing is left out, can be confronting.
Speaking on the phone also allowed them to terminate the call at any time without feeling guilty.
It is already well-documented that people are concerned about being ‘sold’ something.
All these factors are acceptable and companies have been heading towards direct sales for many years. It should come as no surprise to any adviser that more direct business, excluding the role of an adviser, will be written.
If it’s any consolation, it is at claims time when reality hits, and the quality of underwriting and claims acceptance comes to light.
Everyone wants a bargain, but they also want to get value for money. That value becomes apparent when a claim is lodged.
There are ways advisers can discourage consumers from directly approaching online companies.
Advisers need to offer something direct companies don’t – something that will provide a real value to clients and keep them loyal to the adviser.
It has long been said that the sale of products has been dressed as financial planning. But clients who go direct do so for insurance needs and not financial planning.
Why don’t advisers either say they are insurance salespeople and be totally transparent or provide actual financial planning?
There is well-documented evidence that half the Australian population is drowning in debt and will have nowhere near enough for retirement. Yet, these same people are fully employed and earning sufficient income to meet their debt payments.
There is a better way that can see many pay off their debts in less than half the time and start to use that money towards retirement. It is this service that advisers need to be working hand-in-hand with clients. It also highlights the need for insurances and, therefore, makes the sale more relevant, without concerns about any other factors.
Nobby Kleinman is chief executive of Money Rules
Sorry guys, you can stand around rubbing each others backs and self praising all day but nothing will change the client experience for most that is a ridiculous session of “compliant questions and compliance” at a super ridiculous and outrageous cost due to this compliance. Bleat on and on about service and duty but you all know the cost is out of control. Thanks to your glorious fee eater, the red tape loving FPA.
My experience from 30 years in the life insurance industry is that insurers would prefer if there was no adviser involved at claim time. It has gotten to the point where they are actively trying to exclude the servicing adviser during the claims process, especially for income protection. I find it ironic that insurers also stop paying servicing commission on income protection policies when a client goes on claim. The client is the big loser here. My experience has shown that there is a better outcome for the client when the adviser is there representing their interests.
Well said Nobby. Many are DROWNING in debt and family commitments with rising costs. Financial advice with best interest in mind at all times is needed. Slamming advisers that can provide clear guidance in a structured manner is what is needed. Alas Nobby we have nitwits running and ruining our industry, compliance over the top, political ideology in tow, lobbyists from the FSC to look after says government so as for the consumer who is in debt and drowning, kids who cannot afford a home, let alone rent, costs of living increases squeezing families….will those in charge with all their inquiries, advisers to ministers, ministers, royal commissions, reviews, regulatory changes and government agencies like ASIC, ATO, Dept of Human Services, …make any sense to help the consumer. No…just play pretend to do something when all they do amounts to nothing and for their incompetence, they get pensions at the taxpayer expense, a bloated salary they do not deserve and an over funded pension. Sickening !!!!
Insurance policies are like parachutes-you need to make certain they work when you need to use them!
The direct insurance marketing and selling is a wonderful prospecting source when advisers get to talk to these people who don’t understand what they have done buying a direct insurance product and think its going to work.