5 trends to include in your advice service planning

The beginning of a new year is a good time to review processes. Russell Hutchinson gives us five trends to focus on for 2020 and beyond.

Tuesday, January 21st 2020, 6:54AM

by Russell Hutchinson

If documenting, or re-documenting, your advice process has got to the top of your to-do list this quarter, then it is worth checking our assumptions about how the world works before you start.

The obvious new baseline is what we know about compliance: what will be required of your process documentation by the regulator must also be part of the specification. But it would be dreadfully depressing if you were to stop there. After all, the process exists to give good advice, surely, not merely to comply.

Considering the changed environment for customers must surely be the first stop. Assumptions about the situation of clients that need to be challenged include these:

House prices
A common topic of conversation, and yet, for those of us who are interested in neither buying nor selling it is easy to get out of touch. Knowing what the typical house in your area costs as a multiple of typical income is a great place to begin. In Auckland that ratio is eight times – one of the highest in the world. Understanding the budget impact of the high debt levels is both a challenge and an opportunity in insurance planning.
Household composition
The make up of households is changing too. More in Auckland than elsewhere, but the incidence of wider family, and even non-family sharing houses is on the rise everywhere. In Auckland over a third of households are now "non-traditional" in make up, mainly driven by a need to share costs. Traditionally insurance advisers focused on getting a couple in the same room to ensure the ability to make a decision, if the budget is supported by a third person, or shared with another family, mortgage protection is an issue for them all.
KiwiSaver membership
KiwiSaver membership passed three million recently. There are only 4.5 million of us. So now two thirds have a plan. That is a significant piece of common ground on which to start a conversation – even if the place you want to go is a discussion about risk, it often helps if we have a common place to begin.
Opportunity
There are about a million people that are aged between 18 and 65 and are in work that don’t own any insurance. Maybe you want to target this group. Knowing the size of the opportunity is sometimes refreshing. It is a roomy market with plenty to be done.
Preferred media
Perhaps its time to renovate your baseline for client communications too. Every time we get something on paper in an envelope we now check with the sender to see if we can switch that to email delivery – it makes filing so much easier. But we’re fuddy duddy old people – our kids all prefer advice by messenger services, or if you must, then text. New Zealand has one of the highest take up rates of Facebook in the world – and response rates from Facebook Messenger are probably better than mail. That could be an opportunity.

I could go on, and I am sure you could too. Checking the environment before making plans is just one of the fundamentals of effective strategic planning that may have an energising effect on how you offer your service.

Tags: communication Opinion Russell Hutchinson Trends