Powered by MOMENTUM MEDIA
subscribe to our newsletter

Life insurance reforms hit adviser revenue

New research by Investment Trends shows the proposed life insurance reforms have already hit advisers’ revenue, with half saying they have stopped writing new insurance business in the past year.

According to the Investment Trends 2016 Planner Risk Report, which surveyed 620 advisers in June 2016, the average adviser has seen risk advice fall from 35 per cent of total practice revenue in 2015 to 28 per cent – its lowest level since 2013.

Several advisers have stopped providing risk advice altogether, with 12 per cent not writing any new risk business in the past year, up from 10 per cent in the previous study.

“The LIF reforms are already testing the business models of financial planners across Australia,” said Investment Trends senior analyst King Loong Choi.

“Not only are they already reporting a fall in risk business, more than two in five planners expect their practice’s profitability to decline if the LIF reforms are implemented.”

Advertisement
Advertisement

The research also showed that about half of advisers said they stopped writing new insurance business with at least one insurer in the past year, meaning insurers must solidify their relationships with advisers.

"The recent media scrutiny has triggered planners to demonstrate they are picking the best insurers for their clients," said Mr Choi.

"In addition, insurers need to grow their brand awareness among consumers because it is easier for a planner to recommend an insurer if the client has already heard of them."

Insurers can improve retention and reduce attrition by being responsive to planners' needs and keeping them satisfied, the report said.

Some of the opportunities for differentiation include addressing any inefficiencies in the application process, providing planners with great support and improving their brand image among consumers.

PROMOTED CONTENT


"There are great opportunities for insurers to benefit from switching activity, but they also need to be careful to not lose out from this," he said.

[Related: Mortgage group slams Trowbridge report]

Life insurance reforms hit adviser revenue
mortgagebusiness

Latest News

The chief of Australia’s largest bank has said lenders should act pre-emptively and shift their floor rates for mortgage serviceability am...

Total household wealth reached a high of $13.4 trillion in the June quarter, primarily due to rising property prices, according to the Aust...

The property exchange settlement platform has been granted approval to establish an Electronic Lodgement Network in the ACT.  ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.