Reinventing insurance advice
Here are some business innovation ideas that will generate leads and retain existing clients in an age of declining commissions.
With the move away from commissions and the growth in fee-for-service models, we’re constantly hearing the refrain about the need to innovate. Certainly, I’ve written quite a bit about it in this publication.
But what in practical terms might that look like for insurance advice specialists?
There are a myriad of services – software and online tools – that people can use to get the information they want or think they need. Potential clients are now, more than ever, able to utilise technologies. They don’t have to pay an adviser until they want to, are ready to or think they need to.
Advisers should seriously consider being proactive and integrate these technologies into their practices to maintain relevance, offer a service that is more holistic and more considerate of a client’s whole life picture and ultimately more responsive to client needs.
As an example of a technology we are embracing, this month, we launched a cash flow management service by partnering with an Australia-based third party, which already offers this product as a standalone service on the market.
It’s a tool that will allow us and a client to know their net worth at any moment, including exactly where their money is and where it’s going (updated in real time from all accounts and investments). As a result, we will be better placed to deliver on their overall plan.
In the risk space, we are bound by strict obligations to ensure that clients can afford their insurance cover and a cash flow management tool is part of the necessary service of monitoring a client’s finances.
As a recent example, a client came to me, wanting to change the structure of his insurance premiums. He’d had a change (decrease) in income and was in an uncertain position in his employment. While I could understand what was driving his decision, looking at his cash flow, I had to advise against it.
We are also using this new service to retain clients and generate new leads.
On retention: We are offering this service complimentary to our Diamond and Diamond Plus clients in 2017. Like everyone in this industry, I know that hanging onto a client is a lot easier than finding a new one. It also sets the package of Diamond and Diamond Plus clients apart and ensures they see the intrinsic value of paying for that service.
On generating new leads: We’re advertising the service heavily on our social pages to engage new clients. Possibly younger wealth accumulators who may see such a service as very relevant to their needs (and therefore see the relevance of us as a whole) as they begin on the path of proactively setting themselves up for the future.
Whether it’s cash flow management or another innovation, it’s about reinventing your service and staying relevant. Such innovations put a fence around your clients so you can meet as many of their needs as possible and they don’t feel inclined to go elsewhere. It will also set you apart from other advisers, ensuring you stand out in a sometimes saturated market by offering a range of services that others aren’t.
Mark Rando is senior adviser and managing director of Rando and Associates, based in Bunbury WA. He is state chair of the MDRT and was a finalist of the AFA Adviser of the Year 2011, 2012 and 2013. Mark currently mentors other advisers in Australia and overseas.
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