Advisers scale back risk focus
Financial advisers are spending less time speaking to clients about insurance, and increasing the proportion of risk written on-platform, Investment Trends research has found.
Advisers are also rationalising the number of insurers they use, which has dropped from 3.8 per adviser on average last year to 3.4, the July 2013 Investment Trends Planner Risk Report found.
The survey of 1,159 financial planners found the amount of client time spent talking about insurance needs by planners fell for the first time following several years of increases, slipping from 20 per cent of client time in 2012 to 18 per cent.
This was driven by a recovery in investor sentiment and increasing flows to growth assets, the research firm stated.
“The volatility in the markets that lasted most of 2011 and 2012 had driven planners to focus on increasing the role of insurance advice within their businesses, but the return in confidence earlier this year has meant planners were able to write a lot more non-risk business this year,” said Investment Trends senior analyst Recep Peker.
“An outcome of this is that they are again spending the normal amount of time talking to clients about their insurance needs.”
Despite the levelling out in the 2013 study, respondents indicated the Future of Financial Advice (FOFA) reforms may be a catalyst to write more risk business. Almost one quarter (23 per cent) of planners said they plan to provide more life insurance advice as a result of FOFA.
The study also found the proposition of risk business written on platform had increased over the past year from 34 per cent to 39 per cent, after growing from close to zero 10 years ago.
“The main factor inhibiting more risk businesses on platforms is the limited range of insurers on offer, and indeed planners continue to ask for choice of insurer on platforms, most often because they believe this allows them to provide the best deal for the client,” Mr Peker said.
Class action filed over grandfathered commissions
Major law firm Slater and Gordon has today filed a class action on behalf of 500...
AFSL forced to shut down robo-advice tool
A Sydney-based licensee has voluntarily shut down two digital advice tools follo...
Closing advice gap on ASIC’s radar for 2020
ASIC chair James Shipton says he is “acutely aware” of the growing shortfall...