WhileAssociated Planners’ Solar product remains the only risk master trust product currently in the market, the news last month that Professional Investment Services (PIS) is set to launch such a product, raises the prospect that more dealer groups and insurance companies will come together in the future.
However, although Associated Planners managing director Ray Miles says the Solar risk product is currently facing difficulties in attracting more insurance groups to list on the product’s menu, PIS says it is still important to explore the potential of risk master trusts because of the limited options currently available in the market.
“There is no creativity on the risk side, and we do need to put some lateral thinking in. It’s an opportunity to think a lot harder in terms of risk and an investment plan,” Professional Accountants Limited (PAL) managing director Grahame Evans says.
However, he does concede that it is not as simple as replicating the principle of an investment master trust, because of the need for greater diversity and management of investments in a risk master trust.
The different insurance needs of clients requires a product that is both accommodating and flexible, while still remaining cost-effective.
“There is no guarantee that it’s going to work. And it’s important we don’t marginalise the insurance area. We have to look at making sure we are not trying to eke out the last bit of margin we can,” Evans says.
He says the ultimate test for the development of such a product is whether it stands out from a client perspective in meeting their needs.
Evans says because a successful risk master trust model has not been available, it is difficult to predict whether the risk master trust concept will become as successful as its investment counterpart.
That said, the inability for clients to change their insurance provider when their life circumstances change, creates a basic market need for the development of a successful risk master trust.
—Fiona Moore
