From our industry’s perspective, it has been hugely disappointing to see the serious lack of understanding that still exists around the different types of life insurances and the invaluable role advisers play at claim time.
Understanding, of course, takes time and is built on good communication and trust, and in the public domain, it has been argued that advisers have done neither well.
As we have certainly seen in the past two weeks, there is still much work to be done to get all the stakeholders of the advice industry – government, regulators, consumers, industry associations, dealer groups, banks and practitioners – on the one page.
That is: yes, advice is worthwhile. Yes, advice is valuable.
Synchron has had the opportunity recently to share these views with government ministers and representatives and will continue to do so going forward. We see this is a real way we can contribute to educating another stakeholder of our industry on our value and our worth.
However, communication is a multi-faceted discipline that requires the delivery of tailored messages to various stakeholders which address their needs and interests.
Despite this, there are just two key messages that need to be delivered to facilitate a better understanding of the differences in insurance products and the role of advisers.
The first message is: most advisers, including those in the Synchron network, do not sell CommInsure Group insurance policies.
The claims scandal that has embroiled CommInsure is squarely focused on the claims experience of people with group cover through industry funds, not on individual cover where the consumer has worked with a financial adviser. We believe the one retail policy, a legacy policy written in excess of 20 years ago and as an orphan, did not have an adviser assisting in the claims process.
The second message is the huge difference that exists between advised insurance products and direct insurance products.
An advised insurance product is underwritten at the time the product is issued, so matters such as the consumer’s financial and medical information are gathered and provided to the insurer at this time. This means, when a claim is made, it is less likely to be denied as all details have been disclosed at the time of underwriting.
We need to get better at educating all our stakeholders, explaining our processes, clarifying issues, correcting information and clearly stating the facts.
I am not saying that better understanding will prevent claims discrepancies. I actually think we will always have these as they are complex arrangements where every insurance case is different as is every consumer.
But advisers are the only ones who at the time of claim stand with the consumer and work to make that claims process as smooth as possible with a desirable outcome.
Back to the issue of trust. The CommInsure scandal has actually presented the industry with a great opportunity to highlight the great insurance outcomes they help deliver. That providing insurance and protecting people’s lives and well-being goes back to the very building blocks of the Australian financial advice industry.
We need to get beyond the disappointment of another scandal and criticism on things that have nothing to do with us, and tell the story with facts, case studies and evidence. People will be interested if we present the ‘other side’ of an issue, and this opportunity stands before us now.
Australians do need help in selecting the right insurance and investment products to match their needs. They do need someone to hold their hands when investment markets go south and when their luck changes and they need to make an insurance claim to help their families. Financial advice is worthwhile. Financial advisers are valuable.
Don Trapnell is director of Synchron
