There are a whole range of factors that call into question the results of the recent Roy Morgan survey on life insurers.
The latest life insurer survey published by Roy Morgan doesn’t paint a good picture for advisers.
How could a client who purchased their insurance direct be a quotable comparison to having dealt with and purchased through a broker or adviser? Did they actually experience both to be able to provide the specific judgment?
That factor alone says these results are questionable.
I would hazard a guess that some contributing factors to satisfaction would be having been able to complete the process themselves over the phone which would have given them a sense of personal achievement. They didn’t need an adviser and probably got a better deal because they’re not paying commissions.
There was also the comfort factor of conducting an exchange over the phone rather than face to face. Sitting with an adviser who probes for more detail, to make sure nothing is left out, can be confronting.
Speaking on the phone also allowed them to terminate the call at any time without feeling guilty.
It is already well-documented that people are concerned about being ‘sold’ something.
All these factors are acceptable and companies have been heading towards direct sales for many years. It should come as no surprise to any adviser that more direct business, excluding the role of an adviser, will be written.
If it’s any consolation, it is at claims time when reality hits, and the quality of underwriting and claims acceptance comes to light.
Everyone wants a bargain, but they also want to get value for money. That value becomes apparent when a claim is lodged.
There are ways advisers can discourage consumers from directly approaching online companies.
Advisers need to offer something direct companies don’t – something that will provide a real value to clients and keep them loyal to the adviser.
It has long been said that the sale of products has been dressed as financial planning. But clients who go direct do so for insurance needs and not financial planning.
Why don’t advisers either say they are insurance salespeople and be totally transparent or provide actual financial planning?
There is well-documented evidence that half the Australian population is drowning in debt and will have nowhere near enough for retirement. Yet, these same people are fully employed and earning sufficient income to meet their debt payments.
There is a better way that can see many pay off their debts in less than half the time and start to use that money towards retirement. It is this service that advisers need to be working hand-in-hand with clients. It also highlights the need for insurances and, therefore, makes the sale more relevant, without concerns about any other factors.
Nobby Kleinman is chief executive of Money Rules
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