Risk advice is now a regarded as a much more personal service and is delivered by a much smaller pool of financial advisers, but these remaining advisers must utilise a sensitive touch to convince clients of the value of life insurance.
Since the ceiling on life insurance commissions was introduced by the Life Insurance Framework, capping it at 60 basis points (bps) up front and 20bps ongoing, distribution has decreased with only a few hundred advisers that specialise in risk advice.
But Your Vision Financial Solutions founder and director Patricia Garcia believes advisers shouldn’t be seen as people “just wanting to sell insurance”.
“You need to be able to explain what insurance is all about,” Garcia tells Professional Planner.
“You have to do that in a way where they know you’re coming from a good place, and you have their best interest. We’re not product salespeople.”
The skills required to succeed in risk advice are centred around gently persuading clients of the value of life insurance. This demands a different approach to previous than what was acceptable in the past.
Traditionally feminine traits such as nurturance, sensitivity and warmth naturally lend themselves to life insurance advice because of its personal health nature.
Zurich Life Insurance head of retail Jacqui Lennon made a similar argument at the Professional Planner Licensee Summit that despite the male-dominated perception financial advice has, the skills required by giving insurance advice in the current era of advice relies on feminine traits rather than sales tactics.
Women in Wealth director Anna Johnston emphasises the importance of soft skills. “You’ve got to be firm while actually making them feel safe and comfortable.”
Johnston says clients that find the firm online are all women who are specifically looking to deal with women.
“I believe that it is a more female trait where you discuss things and it’s more consultative and it’s not look at everything I know and I’ll tell you what’s right for you,” Johnston says.
Female clients are usually more open with female advisers as they feel more comfortable in a setting with “one of their own”, she adds.
“Often they just tell you things, they volunteer things when they’re speaking with a woman and it’s more of a conversation rather than a transaction,” Johnston says.
Johnston says that the women who come to her practice seeking insurance advice are often highly intelligent who want someone to talk to them like an equal.
This does not only apply to female clients. Johnston says the firm also has a lot of male clients “who feel very comfortable dealing with us”.
Being empathetic and approachable while also firm and confident in nature gives female advisers delivering insurance advice a potential edge over their male counterparts.
Garcia echoes this notion and says women “tend to be a bit more empathetic and warm”.
“Some women can have really great soft skills around empathy that could be quite helpful in having these discussions and maybe more importantly around claim,” Garcia says.
She adds that “it’s not about the adviser, it’s more about the client” because female clients are more likely to be proactive in seeking out life insurance advice, being naturally more “risk averse”.
“I think the caring nature of females means that they want to protect their children and their family more,” Garcia says.
Whether more female advisers will specialise in life insurance advice or include it in their offering in the future is debatable.
Garcia puts forward the argument that new female advisers who have experienced money issues in the past relating to lack of insurance may be more likely to want to deliver in the future.
However, delivering life insurance advice still poses risk to the adviser, regardless of gender. Johnston predicts that this risk will continue to deter advisers male and female from entering the space.
