Multiple insurers not on the cards, yet
Introducing an additional insurer — Asteron — on its FirstChoice platform may make Colonial First State a leader, but it appears to be short of followers at present.
OnePath, IOOF and Netwealth stated that they were not going in that direction yet, while MLC, AXA, Macquarie and BT Financial Group were unavailable for comment.
Netwealth recently launched its LifeWrap insurance facility in partnership with AIA Australia. Netwealth executive director Matt Heine said his company was not in any discussions with other insurers. However, he said Netwealth would look to add multiple insurers to its platform over time.
“I think it’s important that we start to gain traction and learn from our current arrangement [with AIA], and further down the track we will go with adviser feedback and based on their views build on the next phase,” Heine said.
OnePath stated that at this stage it only offers its OneCare insurance product on its OneAnswer investment platform, although multiple insurers may be a consideration in the future.
“Continuous consultation with financial advisers is a key component of our product development process,” a spokesperson stated. “Therefore, we will always work closely with our adviser network to provide products and solutions that meet their requirements now and into the future.”
A spokesperson for IOOF simply stated that it intended to stay with one insurer — Tower — which it was happy with for now.
According to Investments Trends, financial planners have been calling for a wider choice of insurers on platforms for some time. Analyst Recep Peker said the most recent financial planner survey showed that in terms of improvements on investment platforms, 41 per cent of advisers stated that they would like to select from a range of insurers — a response that had been consistent over the last few years, he added.
Peker said Investment Trend’s latest planner risk report for October 2010, due to be released in early November, showed that 80 per cent of the 744 planners surveyed were advising on risk with the use of a platform or financial planning software, and this was up from 71 per cent in 2009.
“In 2008, the bulk of risk product transactions were conducted through the risk providers,” Peker said. “However, many indicated that they would prefer to move these transactions to their planning software or main investment platform. This trend continued in 2009, and I guess more life insurers were making it possible for planners to upload life insurance transactions from planning software or investment platforms. As life insurers increase this capability, planners’ use of platforms and planning software will increase.”
Peker said platforms would have to make enhancements on insurance offerings or risk losing business. He said it was more likely that the wraps would introduce multiple insurers as opposed to master trusts, since they already offered much in terms of investments, direct shares, margin lending and insurance.
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