Question: Can you define what you do?
Good Returns' new insurance columnist, Jon-Paul Hale, kicks off by asking advisers as simple question: "Can you define what you do?" It may sound simple, but the answer could be difficult.
Tuesday, March 20th 2018, 6:06AM 
1 Comment
by Jon-Paul Hale
Ok sounds easy right? You sell X, pick your label.
However, when you boil it down, is that what you do?
After nearly 20 years in this industry, we still struggle to explain what we do.
Why? Because what someone in financial services does can be very very broad, even when confining oneself to a narrow product set, like life insurance or mortgages.
Take life cover for example; to the question of; How do you advise clients on life cover?
I often get a blank look and a question; In what situation? Normal kitchen table, family, house and kids. Umm.. is often still the answer.
Moreover, this is due to most of us shooting from the hip when it comes to advice. Sure we have template-based reports, and we have some needs analysis or fact find information.
When it boils down to it, when coming up with the numbers, most advisers make it up as they go along. I mean that in the nicest possible way, you have an approach in your head you use and mostly you are consistent with it.
However, how consistent are you with it?
Have you reflected on what that looks like for your client's reality when they are facing the opposite wall with no partner and life is still going on?
What does good advice look like?
It is a bit like art, you know what good and bad art look like, but defining the terms good or bad is difficult, it is very subjective.
In our world, we have the same challenges with defining what good and bad advice looks like, but we know it when we see it, with the unfortunate reality hindsight is the lens used far too often.
We are heading into licensing for everyone, and we have had years of seminars telling us we should prepare.
Well, it is nearly here, part of licensing is going to be about being able to demonstrate that you can give good advice.
The regulator for licensing is not going to judge you on what you say, but more that you can demonstrate you have a process for your advice.
This is going to include how you calculate your numbers. Disability products easy, but your lump sums, how are you going to go with that?
It is things like this that are ultimately going to determine if you are going to be a licensee adviser or a sales agent working under a licensee's advice process.
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My take is whether you shoot from hip or have a complex calculator to arrive at amount of Life, Trauma, Disability Cover, the high premiums cost of the ideal insurance package remains unafordable and the client cuts an advisers recommendation in half due to budget constraints. The cost of increase in insurance premium year on year far outweighs the increase in paycheck of many individuals . We need to address how to make insurance "Affordable" with people living longer with modern medications. How is any insurance going to be affordable 5 years from now for the client? Advisers who think 50 clients we signed up this year will still remain with them 5 years from now will have to rethink if premiums keep going up. The answer is to reduce the underinsurance gap, increase the pie, get more younger generation signed up as they can subsidise the cost of older people claiming. Remove the myth through education that insurance is only required after you get married and are 40 plus. Affordable premiums is an industry issue to ensure every client is able to sign up and sustain a full package during their working life and not cut an insurance recommendation in half to suit the budget.