The first talks about ‘sharks’ and highlights the value of retaining policies for the long-term. His business is focused on getting clients to take out enough cover and hold it for a long time. In other parts of his documentation he quotes Asteron Life statistics showing the average age of cancellation of products, and the average age of claim.
His business is the insurance equivalent of the buy-and-hold strategy to optimise value. Product and insurer selection are given a reasonable focus, but within the context of an overall planning approach which also picks up a wider financial planning and risk management context.
The other adviser talks extensively about product change.
He gives real-world examples of premiums being hiked when policies have been in-force a while and the changing features and benefits. He goes into some detail about different claim scenarios and what is paid when. He compares the likely pay-out amounts and studies the detail of product and provider selection very closely.
His business is the insurance equivalent of the trader – he details the conditions under which he believes a switch should occur and makes it clear to clients that is how he will deliver value to them – by moving them to the new best product.
There’s the switching issue right there for you, uncomfortably present in an adviser value-proposition to clients. Some people would give it another name, perhaps depending on whether they would win or lose in the transaction.
So this highlights the access and advice issue powerfully.
There is a question of whether it is adviser-led or client-led?
I think that the client must at least have something to do with it. The issue is increasing client sophistication: they are used to researching, comparing, selecting, and switching between an increasingly bewildering numbers of options in almost every sphere of consumption, from kitchen benches to mobile telephones. So they expect the same with insurance.
Of course the adviser must have something to do with it as well. If I were an insurer I would want the freedom to deal with both advisers, but I might not want to pay them in quite the same way.
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