Reticence to sell destroying risk industry
Advisers' culture-driven reluctance to sell is contributing to the dearth of the life insurance industry as we know it, according to Synchron's Don Trapnell.
The licensee director believes political correctness is contributing to an unwillingness to use emotion as a hook for life insurance policies and is ultimately making Australia's risk model unsustainable. "One of the major reasons for lapse rates appears to be that clients fail to fully appreciate the emotional reasoning behind keeping a policy intact," Trapnell says.
"And the reason they do not appreciate it is due to the fact that advisers are now reluctant to explain these reasons because they do not want to be seen to be selling.
"Given the unacceptably high level of under-insurance in Australia, this is simply not good enough."
Instead of using emotional reasoning, such as the protection of family, advisers have taken to a more logical approach to selling, with figures the centerpiece of their pitch.
Trapnell believes logic is a poor fit for life insurance and encouraged advisers to introduce emotion into the conversation.
"Although it is vital for younger advisers to have technical knowledge, they also need to be mentored by more experienced advisers who have been through a period where ‘sales' was not a dirty word," he says.
"The pendulum of political correctness has swung too far and the reasoning behind the whole purpose of life insurance has swung with it."
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