Speaking to ifa sister title Risk Adviser, Michael Baragwanath, director of Charter Financial Planning member firm Enva, said if the recommendations of LIAWG chairman John Trowbridge are implemented, advisers will need to be “significantly more efficient” in order to reduce costs and turn a profit.
“If you have a look at what is required by the future adviser, an adviser must be significantly more efficient than they are now; they must be using every bit of technology that they can get their hands on to basically lower the cost of delivering advice,” Mr Baragwanath said.
He also pointed out that advisers will need to look at ways to reduce the amount of time they spend servicing their client, from 10 or more hours down to “no more than two”.
As part of the process for reducing this time, insurers will need to take responsibility for the underwriting process, he said.
“I think the idea of underwriting will die. You will not have any time to be involved in underwriting,” Mr Baragwanath said.
“Now it might still happen, but the insurer needs to do all of it and the adviser needs to be completely separate from it, because if you are spending more than two hours [servicing a client] you are now losing money.”
He added that if the remuneration structures proposed by Mr Trowbridge were to be introduced, marketing and client acquisition will need to be another key focus for advisers.
Risk advisers are appealing to colleagues to participate in a ‘Trowbridge impact survey’ to let insurers know of their views:
Hello Allan,
Firstly thanks for taking the time to look through my profile and your comment.
You may have missed that I am a practitioner adviser having left the institutional role 10 months ago. I did made a submission to Trowbridge and I would be happy to send it through but these are my own views. I’ve drawn on my experiences working with many different advisers over the past 7 years and then applying those learnings to an operation I share with my business partner.
Is the thrust of the argument to offer less service? I guess it depends on your definition of service.
Is it better service to hand write and personally deliver a letter or send an email?
Obviously the former, until you compare the cost of each.
I don’t have all the answers but I think we need more efficient solutions.
Valuable and constructive advice from a senior executive who is part of a large, vertically integrated insurance company chain, FSC member, and who I assume lodged a submission to Trowbridge.
Ideas how to deal and accept the recommendations are well received. I wonder if the article information was fed down the line?
Just to clarify and and make sure I did not misunderstand, the main thrust of acceptance – reduce your service levels? To the person who is purchasing the product from you.