Life companies need to invest more in data feeds
Up-to-date insurance data feeds can improve practice management for financial advisers but more insurers need to come on board, according to Association of Financial Advisers chief executive Brad Fox.
With pressure on financial services firms to decrease their margins, Fox said cost was one of the biggest hurdles for a true system data feed aiming to keep premiums, cover, exclusions, loadings and commissions up to date.
"It takes a substantial sum of money to be invested by product providers to work with the software providers to create the opportunity to do data feeds," he said.
"It's a cost issue and, therefore, whenever cost is involved it becomes a prioritisation issue."
Mark Rando, director of Rando and Associates, said life companies do not seem to agree as to whether it is their responsibility to improve data feeds, or whether it's the responsibility of an adviser to incur the cost and time of finding out whether their clients' insurance policies are up-to-date.
According to Rando, having insurance data properly fed into his client relationship management system could save his business half a day in the client review process.
One of the barriers to improving this process, he said, may be the industry's move to a fee-for-service model.
"(Improving the data feed process) is in the interest of the software companies because they're going to make a dollar our of it, but not necessarily in the interest of the life companies because they're still focusing on (writing) new business, not on the retention of business," he said.
Fox said advisers need to be requesting better data feeds, but at the end of the day it was in the hands of product providers to fund it.
"This isn't something that's technically not available, it just needs to be built," he said.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025 with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
