{"id":985,"date":"2017-11-16T06:58:04","date_gmt":"2017-11-15T20:58:04","guid":{"rendered":"http:\/\/magazine.riskinfo.com.au\/33\/?p=985"},"modified":"2017-11-17T08:44:45","modified_gmt":"2017-11-16T22:44:45","slug":"afazurich-round-table-making-life-insurance-future-ready-part-2","status":"publish","type":"post","link":"http:\/\/magazine.riskinfo.com.au\/33\/afazurich-round-table-making-life-insurance-future-ready-part-2\/","title":{"rendered":"AFA\/Zurich Round Table: Making Life Insurance Future Ready &#8211; Part 2"},"content":{"rendered":"<div class=\"fw feature1\">\n<h3>Riskinfo joined with the AFA and Zurich Financial Services Australia at this year\u2019s AFA National Adviser Conference to conduct an industry Round Table discussion looking at how advisers, associations, insurers and other stakeholders can innovate across insurance products and services, while also making the provision of advice more efficient.<\/h3>\n<\/div>\n<p style=\"text-align: center\"><a href=\"http:\/\/magazine.riskinfo.com.au\/33\/afazurich-round-table-making-life-insurance-future-ready-part-1\/\" class=\"woo-sc-button dark  silver med\" ><span class=\"woo-\">Read Part 1&#8230;<\/span><\/a><\/p>\n<p><strong id=\"#top\">Table of contents\u00a0<\/strong>(Click these links to move directly to those topics)<\/p>\n<h4>Part 2<\/h4>\n<ol>\n<li><a href=\"#01\">Business Efficiency<\/a><\/li>\n<li><a href=\"#02\"> Specialist Advice <\/a><\/li>\n<\/ol>\n<hr \/>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-848\" src=\"http:\/\/magazine.riskinfo.com.au\/33\/wp-content\/uploads\/sites\/22\/2017\/09\/feature-01-01.jpg\" alt=\"\" width=\"1600\" height=\"792\" \/><\/p>\n<p><b>Panelists (L &#8211; R)<\/b><\/p>\n<ul>\n<li><strong>Jason Spits<\/strong>: Senior Journalist, Riskinfo, Editor, Riskinfo Magazine<\/li>\n<li><strong>Peter Sobels<\/strong>: Publisher, Riskinfo<\/li>\n<li><strong>Phil Kewin<\/strong>: CEO, Association of Financial Advisers, Co-host<\/li>\n<li><strong>Glen James<\/strong>: Managing Director, Fortify Financial<\/li>\n<li><strong>Andrew Rataj<\/strong>: Senior Financial Planner, PFG Financial Services<\/li>\n<li><strong>Phil Anderson<\/strong>: GM Policy &amp; Professionalism, Association of Financial Advisers<\/li>\n<li><strong>Rod Severn<\/strong>: CEO, Professional Advisers Association, NZ<\/li>\n<li><strong>Peter Mitchell<\/strong>: National Sales Manager, Life Risk, Zurich Financial Services Australia, Co-host<\/li>\n<\/ul>\n<hr \/>\n<div class=\"fw ad\"><!-- Either there are no banners, they are disabled or none qualified for this location! --><\/div>\n<h3 id=\"01\">Business Efficiency<span style=\"font-size: 12pt\"> &#8211; <a href=\"#top\">Back to top<\/a><\/span><\/h3>\n<p>Following the discussion on innovations to products and services (see Part 1), the panel considered a combination of factors that it believes will lead to advice businesses operating in a more efficient manner. For both <strong>Andrew Rataj<\/strong>, Senior Financial Planner at PFG Financial Services and <strong>Glenn James<\/strong>, Managing Director at Fortify Financial, it comes down to good housekeeping and not an off the shelf solution from a third-party provider.<\/p>\n<p>\u201cGoing forward, advisers and advice practices are going to have to be much more organised and on top of their client base\u201d, said Rataj, adding that the key is to retain clients and provide an ongoing service that clients value and continually understand why they&#8217;re in a policy. \u201cWe\u2019re competing against the direct channels and the other channels where there may be cheaper policies, but as long as clients can understand the features and why they\u2019re in the policies, then they&#8217;ll stick around,\u201d Rataj said.<\/p>\n<blockquote><p>just do one thing well<\/p><\/blockquote>\n<p>James said his approach comes from a different angle and that he has set up his business as if he had one client \u201c\u2026and I service them well, and then just duplicate that with all my clients.<\/p>\n<p>\u201cAt any one time a business owner should be able to print a report to see what stage every client is at in the new business pipeline, and many can\u2019t do that. But if you set up those efficiencies to become more compliant, nothing gets missed. My challenge to any adviser who might be reading this is: just do one thing well,\u201d James said.<\/p>\n<p>As for the role of a licensee in assisting advisers, James believes they should empower their authorised representatives to have a profitable business and be compliant, but he questions whether the help advisers need is what is being supplied by their licensees.<\/p>\n<p>His message to licensees was: \u201cDon&#8217;t come to me and help me with my client value proposition. Come to me and help me deliver advice efficiently.\u201d<\/p>\n<p>AFA Chief Executive, <strong>Phil Kewin<\/strong> sees common traits among practices and advisers who have efficient business models. He said for authorised representative licensees these traits usually include coaching of the adviser and an active engagement with the advice businesses under its banner.<\/p>\n<p>\u201cThere is often a correlation between some sort of active management from the licensee and the advisers building a business plan, setting a clear value proposition and having the clear view of what the client looks like,\u201d Kewin said.<\/p>\n<p>His counterpart in New Zealand, Professional Advisers Association Chief Executive,<strong> Rod Severn <\/strong>said he continues to see successful advisers who run their practice on a very low-tech basis, with some not even having a website, and who instead rely solely on referral business.<\/p>\n<div class=\"fw ad\"><!-- Either there are no banners, they are disabled or none qualified for this location! --><\/div>\n<p>\u201cThey say, \u2018I&#8217;m not interested in technology. I do all my business on referrals, and I use the phone, and I&#8217;ll text and I&#8217;ll go and knock on the door and I&#8217;ll see them personally\u2019. And that&#8217;s the way they do business. But I\u2019m not sure how sustainable that model will be into the future,\u201d Severn said.<\/p>\n<p>\u201cHaving said that, people still want to sit across the table from somebody, and receive validation from somebody who has got a heartbeat and can look them in the eye, and I think that&#8217;s where these advisers will still do business for some time yet,\u201d he added.<\/p>\n<p>For <strong>Peter Mitchell<\/strong>, National Sales Manager for Life Risk at Zurich Financial Services Australia, technology has become a \u2018catch-all\u2019 concept for business efficiency that does not always live up to the hype.<\/p>\n<p>\u201cTechnology has become an all-encompassing word that gets bandied around as the big innovator but it&#8217;s not necessarily the panacea. Technology should be viewed like electricity, in that it will not define businesses but enable many of the processes within them. We\u2019ve observed that in our industry technology is often utilised piecemeal but the key to maximising efficiency is to ensure it runs throughout the entire production chain. Your clients\u2019 behaviour and your buying behaviour are constantly evolving, and unfortunately they do not delineate the experiences by industries,\u201d he said. \u201cThis means the experiences they are demanding are becoming more onerous and in an environment where margins are getting squeezed technology is the only viable enabler. In short the way clients interact with you is also evolving\u201d Mitchell said.<\/p>\n<p>He continued, \u201cWe found from an inter-generational research paper we just completed that of your current clients only two per cent of their children will maintain their connectivity with you. So, from a sustainability and profitability perspective, if you can&#8217;t make the technology work and are unable to give the right type of client engagement, via the appropriate channels being demanded, then poor advice is going to be at hand for everyone.\u201d<\/p>\n<blockquote><p>advisers should be adopting new forms of communication but should use the same rules around providing advice they use with older forms of communication<\/p><\/blockquote>\n<p>So far, the discussion has been about business efficiencies in servicing existing clients, but is there a way to become more efficient in sourcing and contacting people who may need or want advice for the first time?<\/p>\n<p>Advisers have turned to social media and some are using online tools to educate clients or provide financial literacy, but will 21<sup>st<\/sup> century efficiency interfere with 20<sup>th<\/sup> century legislation still trying to catch up to the new realities of advice and information?<\/p>\n<p>AFA General Manager Policy &amp; Professionalism, <strong>Phil Anderson<\/strong> does not see this as the case and said advisers should be adopting new forms of communication but should use the same rules around providing advice they use with older forms of communication. As such, Anderson says posts on social media should not be considered non-compliant unless specific advice has been given.<\/p>\n<p>\u201cI don&#8217;t see social media as necessarily something that prevents you from doing business. It has to be something that promotes business, and if you communicate with a client via social media, how is that different from communicating with them over the phone?\u201d Anderson said.<\/p>\n<p>\u201cYou have to be careful about giving personal advice and make sure that there are disclaimers. If there are particular issues that advisers are experiencing with the use of social media then we need to go to the regulator or the government and say, \u2018how do we solve this?\u2019,\u201d he added.<\/p>\n<div class=\"fw ad\"><!-- Either there are no banners, they are disabled or none qualified for this location! --><\/div>\n<p>Anderson believes there is a role for regulators and government in helping advice businesses be more efficient but it requires an understanding of how advisers work and what each can achieve for the life insurance and advice sector.<\/p>\n<p>ASIC\u2019s role, according to Anderson is to implement and enforce the law and provide guidance on how that takes place while the Federal Government set the terms of the law at a higher level.\u00a0 As a result of this any dialogue around modernising the financial advice or life insurance sectors should take place at different levels with both the Government and ASIC, Anderson said, pointing to the ongoing work taking place on a life insurance Example Statement of Advice (SoA).<\/p>\n<p>This work, which has yet to be concluded, requires input from the advice sector, Anderson said, because while ASIC is aware of the need for efficient processes, it has to work within the law and ensure consumers are protected.<\/p>\n<p>\u201cIn this case, when ASIC goes away to design something, there is so much complexity to consider in terms of the production of an SoA. For example, the law simply says you&#8217;ve got to have these things. It doesn&#8217;t say you\u2019ve got to let the message flow in an SoA, or the order that things have to be in. You can have them in completely the wrong order, but still be compliant. So, designing an SoA is a huge job and a huge challenge, and you&#8217;ve actually got to manage all sorts of variables,\u201d Anderson said.<\/p>\n<p>\u201cThey&#8217;re very focused on the client outcome, and the client&#8217;s understanding of the advice. We&#8217;re equally focused on the efficiency of the production of the SoA and I&#8217;m certain advisers will be much more satisfied with the next version of the example Risk SoA than they were with the previous version,\u201d he added.<\/p>\n<h3 id=\"02\">Specialist Advice<span style=\"font-size: 12pt\"> &#8211; <a href=\"#top\">Back to top<\/a><\/span><\/h3>\n<p>Specialist advice may be considered as a personal form of efficiency and innovation with a leading US adviser stating &#8220;\u2026true success comes when you have developed extensive expertise to establish a niche.\u201d But is this where advisers can add value into the future and where they should be spending their time improving their knowledge and skills?<\/p>\n<p>For Rataj there are benefits in having specialist knowledge within an advice practice but he regards moving in that direction as a response to his client needs and not a path to head down first to attract clients.<\/p>\n<p>\u201cOur business is a hybrid approach where 90 per cent of our advisers are generalists but when we felt the need we specifically hired a self-managed super fund specialist and that\u2019s all he does. He doesn\u2019t do risk but has got his niche within an overall general practice and that\u2019s a good way to tackle those specialities that you need to provide within a generalist business,\u201d he said.<\/p>\n<p>\u201cI don&#8217;t think we&#8217;re going to have to go from one extreme to the other by any stretch, but if we need to bring in more specialty, if that makes sense, then we will,\u201d he added, pointing to aged care as an area where more advice is likely to be required in the future.<\/p>\n<div class=\"fw ad\"><!-- Either there are no banners, they are disabled or none qualified for this location! --><\/div>\n<p>For James, using technology and co-operation between advisers allows him to move beyond his own niche as a risk specialist and work with other clients. He said that while he has a particular process and advice philosophy, working with two other advisers means he regards his business as generalist but considers himself and his peers to be specialists.<\/p>\n<p>\u201cI\u2019ve got two other advisers under my brand: an older adviser who is very good with older clients and an adviser who is younger than me who doesn\u2019t want any clients over 30. It doesn&#8217;t matter what they are because the business process can be used for a small business turning over 20 million dollars or for a mum and dad because at key steps in the process we can do different things,\u201d James said.<\/p>\n<p>\u201cPeople talk about specialists going narrow and deep. But why not be a generalist that goes narrow and deep? Do what you want as long as you\u2019re efficient, you&#8217;re helping people, and you\u2019re not biting off more than you can chew,\u201d he added.<\/p>\n<p>Specialisation was also taking off in New Zealand but in a very different way than the Australian market according to Severn, who said small adviser firms, particularly those with mortgage books were under threat from a collapsing market.<\/p>\n<p>\u201cWe have a lot of \u2018one-man bands\u2019 operating in New Zealand, and if they were in the mortgage space they would be very nervous as that market is tightening. Any adviser who has been in the game for the last couple of years who hasn&#8217;t had a chance to establish their referrals, or to build their book and networks is probably not going to make it,\u201d Severn said.<\/p>\n<p>\u201cWe&#8217;re already seeing some members getting out because it&#8217;s just too hard and the baby boomer effect is also kicking in and advisers are selling their books and retiring. There is a place for specialisation, but I think in a small market like New Zealand it&#8217;s a challenge,\u201d he said.<\/p>\n<p>The Australian market was also likely to find that specialisation has been useful for some advisers but has worked against other advisers, according to Anderson, who points to advisers who used to work in the corporate super space and those who are likely to leave because of the Life Insurance Framework.<\/p>\n<p>Kewin said it was rare that any one adviser can cover all bases when it comes to meeting client needs, which is ok as long as the clients are being told that when dealing with an adviser.<\/p>\n<p>\u201cAdvice clients have to be made aware there are a range of advice needs that can be met, and it may or may not be met by the individual adviser they are seeing. The needs may be met by that adviser, by a cooperative of others, or through their business, but as long as the client is aware of the full scope of risks, what their needs are, and how advice can satisfy those needs, I think that is the best way of looking after clients,\u201d Kewin said.<\/p>\n<div class=\"fw ad\"><!-- Either there are no banners, they are disabled or none qualified for this location! --><\/div>\n<p><strong>Wrapping Up<\/strong><\/p>\n<p>In bringing the discussion to a close, the panellists generally agreed that innovation, efficiency and specialisation should not take a front seat at the expense of the need for the adviser to remain relevant to their clients and to those prospective clients they want to attract.<\/p>\n<blockquote><p>The key most businesses don&#8217;t understand is they don&#8217;t know what their clients actually value<\/p><\/blockquote>\n<p>Putting it succinctly, James said to his industry peers, \u201cGet out of your bubble and put yourself in the client&#8217;s position. Don&#8217;t overthink everything or make things too complex because most clients come for one thing and will walk out confused.\u201d He added, \u201cThere is a lot of noise out there and your clients actually don&#8217;t hear any of it. So, stay focused on what they want\u201d.<\/p>\n<p>Picking up on James\u2019 point, Kewin said advisers who are pushing ahead are taking the best of what they have already built and are developing new ways to do those things by sharing with each other and collaborating and creating businesses that are dynamic because they\u2019re focused on their clients.<\/p>\n<p>\u201cWe can tend to get hung up on the big picture of the universe whereas, as Glen said, the clients don&#8217;t see all the noise. They just ask \u2018Can I relate to this person?\u2019, \u2018Can he help me?\u2019, \u2018Can I see myself working with this adviser and do I feel better going to bed at night as a result of seeing him?\u2019.\u201d<\/p>\n<p>For Rataj, the advice businesses that will thrive in the future will be those that remain relevant to their clients by continuing to add value \u201c\u2026and as soon as we stop adding value to our clients we\u2019re in trouble as a business.\u201d<\/p>\n<p>\u201cThe key most businesses don&#8217;t understand is they don&#8217;t know what their clients actually value, and what they might have valued five or ten years ago might not be relevant now. The ones who understand what they value and continue to provide it will thrive and be stronger in the future,\u201d Rataj said.<\/p>\n<p>It is not only advice businesses that will do well with this approach, according to Mitchell, who sees a benefit for the whole life insurance advice chain.<\/p>\n<p>\u201cFrom a product provider\u2019s perspective I see an opportunity for both insurers and advisers to be honest about what they do and, as long as you are sustainable, as long as you are able to add value to your clients to the point where it improves your lifestyle, you will continue to maintain your relevance,\u201d Mitchell said.<\/p>\n<p>\u201cAnd, that&#8217;s a salesperson&#8217;s comment, but it applies to a salesperson, to an adviser, to staff and even to products \u2013 if you maintain your relevance, you will always continue.\u201d<\/p>\n<div class=\"fw ad\"><!-- Either there are no banners, they are disabled or none qualified for this location! --><\/div>\n<p>Expanding on this Severn moved the focus a little further out towards consumers seeing advice as having a value for them and those who provide it.<\/p>\n<p>\u201cIt&#8217;s all about the value of advice at the end of the day and it is the value of advice for consumers, for product providers, and advisers. All of us around this table, whether you\u2019re a direct adviser or running associations, or with manufacturers &#8211; if we just focus on getting the value of advice out to clients, with the sole aim of making their life more financially viable down the track, then we&#8217;re all doing the right thing,\u201d Severn said.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Riskinfo joined with AFA and Zurich at this year\u2019s AFA National Adviser Conference to conduct a Round Table conversation about what innovations should be taking place in the areas of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":995,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-985","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-feature"],"_links":{"self":[{"href":"http:\/\/magazine.riskinfo.com.au\/33\/wp-json\/wp\/v2\/posts\/985","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/magazine.riskinfo.com.au\/33\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/magazine.riskinfo.com.au\/33\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/magazine.riskinfo.com.au\/33\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/magazine.riskinfo.com.au\/33\/wp-json\/wp\/v2\/comments?post=985"}],"version-history":[{"count":0,"href":"http:\/\/magazine.riskinfo.com.au\/33\/wp-json\/wp\/v2\/posts\/985\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/magazine.riskinfo.com.au\/33\/wp-json\/wp\/v2\/media\/995"}],"wp:attachment":[{"href":"http:\/\/magazine.riskinfo.com.au\/33\/wp-json\/wp\/v2\/media?parent=985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/magazine.riskinfo.com.au\/33\/wp-json\/wp\/v2\/categories?post=985"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/magazine.riskinfo.com.au\/33\/wp-json\/wp\/v2\/tags?post=985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}