While many planners recognise the benefits of health and wellbeing programs to clients, uptake on providing advice on insurance is low, leading to adverse impacts on practice revenue derived from risk advice, Investment Trends has found.
According to the research house’s 2018 Planner Risk Report, which surveyed almost 500 financial planners, revenue from insurance advice had this year dropped one percentage point since 2017 and seven percentage points since 2015. It now accounted for 25 per cent of practice revenue.
Investment Trends found that there were many challenges, both internal and external, holding planners back from giving advice in this area. A senior analyst at the company, King Loong Choi, said that planners were looking to insurers to help resolve these issues.
“Financial planners are relying on insurance providers more than ever to alleviate the triple challenge of admin, compliance and heightened regulation, and at the same time, help them build stronger and longer lasting client relationships,” Choi said.
“Many insurers have responded through initiatives such as client health and wellbeing programs, and the majority of planners recognise the range of benefits for their clients. In particular, the benefits planners see for their clients are policy discounts, encouraging them to prioritise their health, and giving them the ability to influence their premiums.”
Planners were divided on the importance of health and wellbeing programs when recommending insurance products, with 38 per cent saying it’s important and 30 per cent saying it isn’t. Just one in 10 clients were currently using such programs on average.
Choi said that there was “a significant opportunity” here for insurers to bridge the gap between the perceived benefits and value of health and wellbeing programs for both planners and clients.
Investment Trends also measured planners’ satisfaction with their main insurers, finding that industry-wide, overall satisfaction remained steady at a high level. Forty-eight per cent of planners rated their main life insurer as “very good”, climbing one percentage point from 2017. ClearView took the top spot in overall satisfaction for the second year running, followed by AIA Australia and TAL.
Satisfaction levels across 12 service categories, covering over 100 individual service areas, were considered in determining overall satisfaction.