Opinion: Too good at selling life insurance?

A needs analysis is an indicator that a more serious job of advising on a range of financial matters is being attempted. This is why it has been considered one of the hallmarks of a ‘proper’ financial adviser – as opposed to someone that merely sells a specific product.

Identifying a needs analysis process with category one services has led to confusion. If you are only selling a category two product – say, most term life insurance – but you do a thorough data capture in order to arrive at a robust calculation of how much life cover is required… have you suddenly stepped over the line and you are now somehow offering a category one service?

Would someone deceptively complete a full financial plan recommending only life insurance? How much consumer harm is possible by doing the best possible job in assessing the need for a category two product well? Could you in effect end up being penalised for doing the job of selling life insurance too well?

We’re not sure and suspect clarification will come.