National accounting and financial advisory firm, William Buck, is bucking the insurance trend by recording a lapse rate of 5.5 per cent which is one third of the average.
ASIC’s Life Insurance Advice Review this week highlighted a record high average of 16.5 per cent. The report also identified over 39 per cent of life insurance advisors were failing their clients by delivering inappropriate advice that is not compliant.
Of the 39 per cent that received a ‘failure’ rating over 96 per cent received upfront commissions.
Sam Kitchen, Insurance Specialist for national accounting and advisory firm William Buck said, “The profession is driven by sales and this needs to change. The lapse and ‘failure’ rates are unacceptable and can clearly be linked to insurance advisors who are being paid upfront commissions.”
“About five years ago, the company introduced an ongoing service model involving regular progress meetings with clients to ensure the client comes first in all of the decisions that are made. The low lapse rate for the firm can be attributed to the ongoing service model. This structure has also helped William Buck create a more sustainable insurance business model that is not reliant on transactional sales.”
He added, “We spend considerable time at the beginning of the client relationship to understand the client’s circumstances, thereby ensuring the right strategy is put in place that best services their requirements. Higher debt levels and cost of living pressure means that life insurance has never been more important, however clients are finding it challenging to find the funds to pay for insurance premiums.
“The firm is focused on long term relationships with clients which is a philosophy that carries across all service areas within the business. Many clients have been with the company for over a decade. Client needs change as they move through the lifecycle. Insurance advice should reflect these changes.”
He continued, “Clients need to find insurance advisors who work for them first and foremost. Insurance is a very complex area and needs to be treated accordingly. Advice should be specifically tailored to the requirements of the individual. The client must always come first.”
