A survey conducted by Risk Hub revealed that 43 per cent of advisers are looking to increase their focus on risk advice. With just 480 advisers writing half of all new business in 2023, according to a report by Adviser Ratings, this increased interest is a welcome shift.
In a recent opinion piece published on ifa, Risk Hub founder Marc Fabris said the renewed interest in risk advice highlights a significant growth opportunity if the right support and systems are put in place.
However, Risk Hub’s survey also found that the associated costs and compliance concerns were the primary reasons keeping advisers out of the space, as indicated by 60 per cent and 58 per cent of respondents, respectively.
In order to capitalise on the renewed interest, Fabris argued the need for greater training and industry support for existing and prospective risk advisers, as well as stronger relationships between advisers and underwriters.
“Given the reduced emphasis on risk advice training in recent years, there is a growing need for more comprehensive support and resources for advisers,” Fabris said.
“The demands of the industry have shifted, and advisers must be better equipped to handle the evolving landscape of health and underwriting challenges. This includes not only understanding the technical aspects of underwriting but also developing strong relationships with underwriters to better manage client outcomes.”
He explained that fostering stronger relationships between advisers and underwriters is key to helping advisers improve their service offering and provide better outcomes for their clients.
“Enhanced collaboration between advisers and underwriters is crucial. Open lines of communication can provide invaluable learning opportunities and help advisers make more informed decisions for their clients,” Fabris said.
“Moreover, insurers need to consider how they can support advisers more effectively, whether through improved tools, clearer processes, or better access to underwriters for real-time advice.”
Ultimately, Fabris believes that while the risk advice industry faces significant challenges, “there is also great opportunity for growth and improvement”.
“By focusing on enhanced data collection, better training, and increased collaboration between advisers and underwriters, we can create a more efficient and effective process that benefits all stakeholders. The key to success lies in embracing change, leveraging technology, and fostering a culture of continuous learning and support,” he said.
“As we move forward, it’s crucial that we prioritise comprehensive field underwriting and early data collection; invest in ongoing training and support for advisers; enhance collaboration between advisers, underwriters, and insurers; leverage technology to streamline processes and improve outcomes; and focus on re-engaging ‘low risk’ advisers to drive industry growth and expand access to quality risk advice.
“By addressing these areas, we can reduce surprises, achieve better outcomes for clients, and ensure that risk advice remains a vital and valued part of the financial services industry. The path ahead may be challenging, but with commitment and collaboration, we can build a stronger, more resilient risk advice sector that better serves the evolving needs of our clients.”
For more from Marc Fabris, click here.
Risk is dead on a personalised advice basis, time to accept it and move on. The only way this changes is if the compliance requirements reduce considerably.
Bringing back the Whole of Life Product would help.
Ted Carroll
What incentive is there for advisers, particularly new ones, to get involved in the risk space? Commission levels make it economically unviable to take on risk-only clients in the family advice space and the compliance obligations for the provision of risk advice are far more complex than other areas of advice. Meanwhile the pool of insured lives is shrinking, resulting in significant premium increases, which, in turn, leads to lower retention levels. Until these issues are seriously addressed, incuding the granting of tax deductibility of advice fees, the problem is only going to get worse.