risk adviser logo

Riskies choosing to stick to ‘core’ speciality

More risk advisers are keeping their focus on acquiring insurance client books instead of diversifying their business by purchasing financial planning books, says Forte Asset Solutions managing director Steve Prendeville.

Speaking to Risk Adviser, Mr Prendeville said in the current financial services market, there are very few specialist risk advisers looking at diversifying their business by purchasing financial planning books; rather, they are “drilling down and becoming more specialised”.

“What I am seeing is more are specialising and are keeping to their core,” Mr Prendeville said.

“Often, the reason they don’t want to buy into financial planning businesses is because they have a skills gap or they have pre-existing referral arrangements or joint ventures with advice firms that would put them in conflict with new business generation,” he said.

There is also a significant demand by financial planners for buying risk books, Mr Prendeville added. 

"The reason for that is because of the predictability of revenue – it is normally indexed for growth. It doesn’t go up or down with market or economic conditions, and it is also more highly valued than financial advice recurring revenue."


Mr Prendeville also said that despite the demand from risk advisers and financial planners, risk businesses are “scarce” in the market.

However, he pointed out that developments within the industry could see that change.

“I think that risk businesses that have been dependent on upfront commissions or have a high turnover of policies within the three-year timeframe; they are likely to have cash flow issues,” he said.

The incoming requirement for advisers to meet higher professional and education requirements may also see many older risk specialists question their future in the industry, Mr Prendeville said.

“Combine the two and you might start to see more risk businesses come to market."

Riskies choosing to stick to ‘core’ speciality
ifa logo

from the web

Website Notifications

Get notifications in real time and stay up to date with content that matters to you.