Life companies need to invest more in data feeds
Up-to-date insurance data feeds can improve practice management for financial advisers but more insurers need to come on board, according to Association of Financial Advisers chief executive Brad Fox.
With pressure on financial services firms to decrease their margins, Fox said cost was one of the biggest hurdles for a true system data feed aiming to keep premiums, cover, exclusions, loadings and commissions up to date.
"It takes a substantial sum of money to be invested by product providers to work with the software providers to create the opportunity to do data feeds," he said.
"It's a cost issue and, therefore, whenever cost is involved it becomes a prioritisation issue."
Mark Rando, director of Rando and Associates, said life companies do not seem to agree as to whether it is their responsibility to improve data feeds, or whether it's the responsibility of an adviser to incur the cost and time of finding out whether their clients' insurance policies are up-to-date.
According to Rando, having insurance data properly fed into his client relationship management system could save his business half a day in the client review process.
One of the barriers to improving this process, he said, may be the industry's move to a fee-for-service model.
"(Improving the data feed process) is in the interest of the software companies because they're going to make a dollar our of it, but not necessarily in the interest of the life companies because they're still focusing on (writing) new business, not on the retention of business," he said.
Fox said advisers need to be requesting better data feeds, but at the end of the day it was in the hands of product providers to fund it.
"This isn't something that's technically not available, it just needs to be built," he said.
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
