Advisers rejig business under new risk regime
Financial advisers will look for efficiency gains to help them offset any costs involved in shifting to the new life insurance commission regime, with research finding that less onerous compliance will be a key factor.
Advisers will also look to automated systems and technology as they begin to look at ways of producing more value under the yet-to-be-implemented regime before the Federal Government.
The views of advisers are part of a survey conducted by Zurich in June among 207 advisers active in the life insurance market, where 37 per cent stated they would respond to the new remuneration system by focusing on efficiency in their business.
Around a quarter of surveyed advisers would look to broaden their advice offering and target the market away from a predominantly risk insurance focus, with around another 25 per cent stating they would specialise in market segments with higher value clients.
Of those advisers who stated they would focus on efficiency, 55 per cent stated a more flexible, less onerous compliance regime was critical with another third stating automation and technology would assist them to adapt.
Zurich's Life and Investments, Head of Distribution, Kristine Brooks said the research indicated many advisers were not look backward to the past but were positioning themselves for the future under the new regime.
"Advisers are clearly starting to think about those aspects of their business where there are opportunities to drive more value in the future. Importantly, they are focussing on those parts of the value chain which are most within their control," Brooks said.
AUTHOR
Jason Spits
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
