February 28, 2019
February 28, 2019 | Adviser News
Now is the time for advisers to tell their story
It seems almost inconceivable, but summer is all but over and we are already deep into the first quarter of 2019.
In our first adviser newsletter for the year we will take a further look at the high cost of medical treatment – and the implications for sum insured calculations - with the third extract from our Cost of Care Whitepaper. Just as Trump and Kim Jong Un sit down for another ‘chat’ about denuclearisation (don’t hold your breath), and a Brexit extension becomes more likely, we examine the factors behind the intense market volatility of recent months, as well as provide an overall market update.
And then of course there is the Royal Commission.
In what seems like the blink of an eye, we have seen the release of the Royal Commission Final Report and the mortgage broker commission debate play out to the point where both sides of politics have accepted that in some circumstances, commissions can actually be positive for consumer.
This last point is crucial as it makes it harder for a government of either persuasion to maintain the line that all commissions are inherently conflicted and therefore all ‘bad’.
Zurich has long supported the idea that consumers should be given a choice as to how they pay for advice – fee or commission. It’s an argument we continue to prosecute with policymakers, with our CEO Tim Bailey becoming an increasingly familiar face in Canberra.
Just prior to Xmas Zurich worked with highly respected researcher Rice Warner to examine consumer attitudes towards commissions. The survey of 1,000 consumers found – unsurprisingly – the majority preferred to access advice via a commission, because they were unable or unwilling to pay an up-front fee from their own pockets.
That research also examined the objections that existed towards commissions. One of the most common was the fear that the adviser would recommend the life insurance product that paid the highest commission rate. This concern has of course been rendered redundant since the introduction of the LIF caps which has seen standardised rates across all products and providers. Clearly we need to do more to educate stakeholders – consumers, regulators, and politicians – about the robust consumer protections that already exist within the LIF regime.
Copies of this research will be launched at our national roadshow, kicking off next week in Brisbane. (Our popular whitepaper ‘The Cost of Care’ will also be available). You can still register for these events here
The speaker line up for these events includes the current AFA Adviser of the Year (Hugh Robertson) and Troy MacMillan and Cara Graham from Practice of the Year (The Wealth Designers). They will sit on a panel which had its first outing at our recent Industry Leaders Forum, and it was refreshing to hear the overwhelming optimism Cara, Hugh and Troy all share about the ability of the advice profession to navigate a path through the all the current ‘noise’ and emerge as a stronger, smarter sector. Importantly, they all agreed that the amount of scrutiny our sector has been under has actually helped their businesses by reinforcing the value of quality advice.
(Optimism is obviously infectious and at the time of writing we are hosting members of our Advisory board, all of whom share the same sentiment).
Many of you may recall that the life industry went through a precursor to the Royal Commission the PJC Life Insurance Inquiry. One of the more pleasing aspects of this process was that the members of the committee developed a genuine appreciation for the value of financial advice and the value of life insurance. We are hopeful this remains a solid platform from which the whole industry can put forward its best foot over the coming years.
We have always said the best way to get through to that 80% of the population who don’t use the services of an adviser is to hear the stories of the 20% who do. Now more than ever is the time for the advice profession, and the thousands of customers it helps every day, to be heard.