When the market research firm Investment Trends delved into how financial planners are involved in providing advice on risk insurance, it found a market that appears to be close to saturation. Based on almost 930 responses, Investment Trends found that 93 per cent of financial planners are actively involved in providing advice on risk insurance.
The fact that growing numbers of financial planners are engaging with risk insurance isn’t surprising, but the level of involvement is now at an all-time high (or, at least, it’s at the highest level in the eight years that Investment Trends has been tracking such things). The proportion of planners involved in risk insurance has increased by 20 percentage points since 2005, Investment Trends says, and the amount of their time planners spend discussing risk issues has increased from 17 per cent to 20 per cent, in the space of just one year.
| Please CLICK HERE to download a PDF of the full version of this Special Report |
Investment Trends analyst Recep Ill Peker says that as more clients’ investable assets are directed to cash, term deposits and the like – and the longer they stay there – the more pressing becomes the need for financial planners to demonstrate some other sort of value in their service proposition.
At the same time, the performance of life insurance companies has also improved, at least in planners’ eyes. Investment Trends says the number of planners who consider the insurance companies they deal with to be “good” or “very good” has increased by 5 percentage points to 82 per cent over the past 12 months. (See Table 1.)
Peker says improvements in technology and websites are two of the key factors behind the improvements. Along with improvements in the insurers’ underwriting performance, planners are well armed and well supported to take the insurance message to the masses.
“Planners are well armed and well supported to take the insurance message to the masses”
However, it’s one thing for more planners to engage with risk insurers as a means of coping with the investment doldrums. It’s another matter to get the public equally engaged. After all, only an estimated two in 10 adult Australians have a relationship with a financial planner, so even if every one of those people’s relationships with a planner led to them being fully and comprehensively insured, it’s still only a small proportion of the overall adult population.
A greater proportion of the population is likely to have some cover, and most likely through their superannuation fund. While some cover is better than none, there remains concern that fund members might be lulled into a false sense of security, believing they have adequate cover when in fact all they have is their fund’s default level of protection. It remains true that insurance is sold, not bought. Worryingly, more people say they’d insure their pets than insure their own lives or incomes.
To download a PDF of the full version of this Special Report, please CLICK HERE.
