Sentry achieved significant milestone recently when the Perth based national dealer group celebrated its 10 year anniversary. Along the way the group has achieved many successes and in the most challenging era in the history of the industry that has seen well known brands and icons disappear from the financial services landscape, the organisation under Chairman and Managing Director Murray Hills has gone from strength to strength.
Commenting on the milestone Hills points to Sentry’s conservative and considered approach as the basis for the group’s longevity and prosperity. “Sentry has steadfastly provided licensing services to independent financial advisers within a cost structure framework that is commercially sustainable to all parties – and will continue to do so!”
As the non-aligned Licensee looks to the future, Hills is cautiously optimistic about the prospects for wealth and risk protection in the Australian marketplace although he points to the need for the details of the FSC’s Code of Conduct to be announced as one example for this guarded approach.
Sentry welcomes the outcomes from Life Insurance Framework (LIF) in general however, Hills does challenge the Life Offices to treat this as a watershed event for the industry where new products, pricing and marketing are introduced to enhance the advice process. He cites products with a three 3 year premium guarantee and insurers needing to stand by their products and provide premium guarantees rather than reverting to significant increases that now occur on an annual basis as examples.
“I do however strongly oppose the 3 year responsibility period as it will be a huge impost on risk based practices to carry and will see many leave the industry resulting in a vacuum of experience and knowledge that will adversely impact consumers in the long run”, said Hills.
“It is quite simply a contingent liability imposed on a business that many will find difficult to handle”.
With the under-insurance dilemma estimated at approximately $1.8billion, it strongly points to the inadequacies of the current system that is not working and so the industry as a whole must respond to address this situation.
Sentry’s operational infrastructure is directed at assisting the dealer group’s advisers to focus on insuring the two capitals – 1) Human Capital and 2) Financial Capital by protecting both through the provision of strategic advice to their clients.
“Non aligned advisers will continue to be regarded as the providers of strategic client focussed advice whereas in contrast those operating in vertically integrated institutional models will be viewed as product merchants”, continued Hills. “IFA’s by their very nature source the market for the best solution to address the individual needs of their clients which is usually a combination of policies from various providers”.
Another distinction that Hills points to is that principals of non aligned practices are first and foremost business people – SMEs who have entered the financial services industry as a viable sector in which to operate a profitable business and enterprise.
As business owners they know and appreciate the cost of acquisition and will have to review their client service offering to ensure all increased costs are adequately covered under the new regime.
The impact of the implementation of LIF from January 2016 will impose financial pressures on poorly run businesses which will see them either departing the industry or expanding their advice pool. Neither of which is a sustainable long term scenario for the industry.
From its inception, Sentry has had a Wealth Protection focus with a strong supporting emphasis for the dealer group’s advisers to consider the risk, lifestyle and wealth protection needs of their clients. To support this, Sentry conducts regular Risk Retreats where subject matter experts present on an extensive range of life risk focussed topics and issues.
In addition, Sentry works closely with Insurers who run technical workshops and ensure advisers have access to them.
Sentry also sees risk advisers adopting some wealth management principles and practices when providing protection solutions and advice for clients. Understanding risk tolerance will assist in determining an appropriate amount of protection for example.
The technical workshops and programs are supplemented by working closely with practice principals on all aspects of their business from strategic advice to corporate governance and business planning. Sentry’s Better Business Forum was established for the dealer group’s leading principals to assist them to implement processes and structures that will accelerate their transformation into leading industry practitioners and role models.
Hills affirmed that he is very positive and bullish about the future of the dealer group, the future of wealth protection in general and he looks forward to working with the Sentry advisers to transition their business as the LIF changes come into effect.
“I will however continue to meet with all adviser associations and encourage them to defend the rights of their members when they encounter special interest groups who confuse turnover with profit”, said Hills.
Hills concluded by confirming that Sentry is attracting a great deal of interest from advisers looking to align their business with a cost effective alternative that is independent of institutional ownership and a management team that has a track record of success with real life/hands on industry experience and expertise.
Source: Sentry Group
