Caps on risk insurance commissions will likely see advisers shift away from servicing young singles and blue-collar workers in favour of higher income earners, research commissioned by Zurich has found.
According to a survey conducted by Lewers Research on behalf of Zurich – which drew responses from 200 advisers – the impending cap on commission payments will push advisers to explore “higher value” clients and shift away from lower income earners.
In fact, the research found that 38.3 per cent said they would become more active with white-collar professionals, while 32.1 per cent indicated they would increase their participation in the small business market.
Meanwhile, 19.1 per cent said they would become less active in the blue-collar market, while 18.7 per cent said they would decrease their participation in the young singles market.
In addition to revealing a likely focus on different markets, the research also found that advisers will look to expand their service offering to provide a “more comprehensive advice proposition”.
The survey noted 41.2 per cent plan to offer more retirement planning advice, 36.4 per cent expect to offer more holistic financial planning advice, and 34.5 per cent intend to offer more estate planning advice.
Head of retail distribution for Zurich’s life and investments business, Kristine Brooks, said “it was clear” advisers are looking to employ a “twin-pronged strategy” to dealing with the Life Insurance Framework (LIF).
“With commissions soon to be capped, it makes sense to explore those segments where ages, sums insured and premiums are likely to be higher,” Ms Brooks said.
“Taking a longer term view, these are also the segments with a higher capacity and propensity to pay fees for advice; many advisers are clearly positioning themselves to supplement commissions with fees at some stage down the track,” she said.
Prior research released by the life insurer – also conducted by Lewers Research – found that just under two thirds of advisers considered themselves ready for the introduction of the new insurance framework which is due to commence on 1 July 2016.
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has refer...
FASEA has announced its August exam sessions will only be offered remotely for V...
A major platform provider has made changes to its functionality to make it easie...