Advice firm in pilot partnership to boost risk advice

Risk Hub has partnered with Loyalty Financial Group (LFG) on a pilot project to address the unmet advice needs in life insurance. 

Risk Hub was launched last month by Marc Fabris, backed by firms including MLC Life and PPS Mutual, to curate resources to improve education and awareness of life insurance as part of financial planning.

It aims to lessen the challenges in providing risk advice, including market complexities, legislative changes, and efficiency hurdles. 

Data from Adviser Ratings showed out of just over 15,000 advisers, 6,373 wrote a policy between January and June 2023.

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When broken down further, 1,324 advisers wrote 75 per cent of all retail life premiums, with just 127 making up one-quarter. The remainder is then covered by more than 5,000 advisers. 

In addition to this, a Deloitte report in August, titled Mind the Gap, found the reduction in risk advice was creating a large gap of underadvised and underinsured consumers. This covered those in the vulnerable, mass, and mass affluent consumers, who needed medium complex advice.

Fabris said: “Risk advice is more complex and costly to deliver than ever, with remuneration models that don’t always support its integration into financial planning practices. Yet, it’s a crucial element that can’t be ignored.”

The firm has now announced a pilot partnership with LFG that will see Risk Hub explore the diverse business model with the LFG network, identify challenges in providing risk advice, and innovate solutions to solve this.

The pilot project will roll out in the coming months, inviting advisers within the Loyalty network to share their experiences and challenges in integrating risk advice. The partnership aims to produce actionable insights and practical tools that can later be scaled to broader adviser communities.

LFG director, Andrew Whelan, said: “We see this as an industry-wide problem that demands cooperative solutions. While this pilot focuses on our own network, the discoveries and improvements we make have the potential to benefit a larger community of advisers and clients.

“We believe that all practices should be accommodating risk advice – whether it’s providing the advice themselves, or referring to a specialist practice within our network.”

Providing risk advice could strengthen advisers’ business, enrich client relationships, and provide critical protection to clients when they need it most.