Acknowledge risk, or risk the consequences
Veteranrisk adviser John Zwiers says the great trouble with the financial planning industry is that it pays lip service to the risk industry — and it has got to stop.
Zwiers, who has been working in risk insurance since 1979, says there are too many investment advisers in the financial services industry, and not enough financial planners.
He says while there are “fantastic” financial planners who cover all bases, the large majority don’t.
“The fact of the matter is, not enough financial planners are doing risk. They’re ignoring it,” Zwiers says.
He believes the criticism launched at the financial planning industry following the ACA/ASICreport on the quality of advice earlier this year was highly deserved.
“Out of 133 plans, none addressed risk. And theFPA, instead of admitting there is a real problem with the industry that needs to be fixed, just went on the back foot with a PR campaign. Planners need to start doing risk themselves, or getting into a partnership with somebody who can. There is no compromise.”
Zwiers describes himself as a “blue collar worker in the industry, doing the dirty stuff like talking to people about heart attacks and death”. It takes a certain type of person to deal with these issues, and Zwiers says these are the people with whom financial planners need to be forging alliances in order to be compliant and provide holistic advice.
And it’s not a lack of quality risk advisers that is the problem — in fact, Zwiers says it’s the opposite.
“There are so many older guys who have the wealth of experience to know how to raise the issue of risk with clients, but they are being pushed out of the industry because of compliance issues. Planners should be picking these guys up to provide risk for their clients.”
If you have the resources, however, to service your clients’ risk needs in-house, now may be the time to ensure you are doing it to your best ability. Zwiers says the place most financial planners fall down on the risk process is the fact-find.
“The fact-find is the simplest part, but many don’t do it properly. The average life insurance claim is $80K to $90K, which makes me think people are getting it very wrong.”
In his session, Zwiers will also be giving tips on how to get the claims process right through to the end and final payment.
He says the most important thing to do is simply get involved, and keep in constant contact with the insurance companies.
“Get very involved, and make sure the company has got all the right stuff they need from you — because without it, they can’t pay a claim.”
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