Promoted by Astute Wheel
Provide valuable, efficient & compliant risk advice using a next generation Risk Insurance Needs Analysis calculator that also produces a Strategy Paper and SOA. The visual nature of these tools allows for the advice to be conducted in virtual (screen sharing) meetings as easily as physical meetings in your office.
This AstuteWheel solution links the insurance needs analysis to other upstream tools such as an electronic fact find; goals-based advice tool; and scope & scale of advice wizard to provide the basis for an easily generated insurance strategy paper or statement of advice.
Each of these tools provides the adviser and client with an interactive and visual experience that is part of the value chain of advice and also captures an evidence audit trail for compliance. The information is only ever entered once and then is passed onto downstream tools where required.
Life Insurance Framework
The Life Insurance Framework (LIF) legislation came into full effect on 1 January 2020 capping upfront commissions to 60% of the first year’s premium and trailing commissions to 20% of premiums in subsequent years. Also legislated were clawback provisions of 100% in the first year and 60% in the second year if a policy lapses (is cancelled).
These rules have made providing life insurance advice a very risky business for financial planners as a substantial amount of work completed could result in little or no remuneration for advisers if the client decides to cancel their policies.
A key driver of the LIF legislation was ASIC Report 413 Review of Retail Life Insurance Advice a damning review of the quality of life insurance advice provided by financial planners which found that of the 202 files reviewed 37% failed to meet the relevant standard for compliance with the law and of the 63% that passed there was significant room for improvement in regards to the quality of advice provided.
The reduced commissions and increased clawback provisions were legislated mainly to put an end to the ‘unnecessary or excessive switching of clients between policies to maximise commission income’ and to ‘improve the quality of advice’.
Aspect of poor advice that was targeted in the report were:
It is self-evident that these short cuts don’t represent quality advice however it is hard to understand how the legislators expected financial planners to find the extra time to provide a higher standard of advice and adhere to the more stringent level of compliance given the subsequent reduction in revenue.
To strike a commercial balance between these competing forces requires a rethink of the traditional paper-based process still used by many advisers that is both time consuming and inflexible requiring information to be captured and re-entered multiple times from initial fact find to statement of advice.
Provide Valuable, Efficient & Compliant Risk Advice
AstuteWheel has developed its next generation technology-based solution that allows information to flow seamlessly along a workflow path from beginning to end. The process is super-efficient because:
Efficient & Valuable Annual Reviews
A comprehensive review process for life insurance can now be offered to your clients every year as the needs analysis process can be completed in minutes once the client’s fact find information is completed.
This provides real value for your clients as death and TPD insurance can, where appropriate, be reduced annually as living and education costs are adjusted each year and debt reduction or asset value increases are automatically factored into the sums insured.
Financial planners can now provide high quality life insurance advice in a cost effective and compliant way either as part of a holistic service offering or a stand-alone service knowing that their clients will see the value of their advice.
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Hans Egger is Managing Director of AstuteWheel
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