Risk advice industry showing signs of recovery in 2025

According to Adviser Ratings’ yet-to-be-released 2025 Advice Landscape Report, the risk sector has continued its slow recovery, with the firm’s founder, Angus Woods, stating on a webinar that they expect new retail business to reach $340 million by the end of 2025.

In comparison, new business hit a low just a few years ago with $297 million reported in 2022, though the research showed there has been a slow but steady climb in the years since.

Looking at who is writing risk, the report found that just 185 – or 1.2 per cent of all financial advisers – wrote 25 per cent of the $315 million of new business in 2024. This group, Woods said, are the “pure risk writers” of the profession.

A further 404 advisers, deemed “high risk writers”, wrote another 25 per cent, meaning that a total of just 589 were writing half of all new business in 2024. However small this number seems, it is a jump of more than 100 from the year prior.

Overall, 6,358 advisers wrote some level of new retail business last year. Notably, this is actually a slight decrease on the year prior, which saw 6,399 advisers active in this space, however, those who are engaging appear to be doing so at a more significant rate.

Even so, Woods said that more practices are actually planning to increase the amount of risk they write, with 720 of the 6,077 practices in Australia indicating as such, which he said is the “first time we’ve seen an uptick in the survey”.

With 32 per cent of advisers saying their clients are asking them about life or income protection (IP) insurance, and so much talk about Australians being under-insured, this is a much needed shift.

Woods suggested it marks a significant turning point from previous years where practices generally wanted to write less risk.

“Previously, those percentages were very, very low. In fact, people wanted to write less risk. As the market, obviously, was finding its feet, underwriting became a little bit more difficult,” he said.

Over the last 12 months, however, insurers have developed greater understanding and systems to manage the major claims areas, such as mental health, by assigning appropriate exclusions and loadings to different diagnoses.

“That has been one area that has held back a lot of advisers from writing risk in terms of the impact that that has on their clients when their clients are being declined or having excessive premiums placed on them, and what that means for their other service,” Woods said.

With more holistic advisers, that middle group of moderate to high risk writers, looking to establish themselves in the sector, Woods said insurers need to be working with them, rather than continuing to put so much effort into trying to get the attention of those category A advisers.

“It’s interesting that risk writers tend to say that they’re over-serviced, and what I mean by that is the 185 risk writers who get umpteen phone calls a day or a week or a month from the same BDMs or every insurer approaching them,” he said.

“And so they’re going, ‘Well, we’re getting over-serviced’ and category B and category C advisers are saying, ‘We’re getting under-serviced’.”