Some handy tools to help start preparing for the future of risk advice

Some handy tools to help start preparing for the future of risk advice

We’ve been busy these past few months, starting to work with advisers on how to handle the proposed Life Insurance Framework when it gets implemented.  Two weeks after receiving confirmation that the new government is supporting the industry-proposed new Frameworks, I thought it might be helpful to share a few free resources we’ve developed.

Although there is hopefully still some refinement that might occur around the 3 year clawback provisions, we now know that the changes will come into effect on 1 July 2016. That’s pretty handy given there’s only eight weeks left before the original start date of January 1! Whilst there are some mourning what they see as being the end of the IFA risk adviser, others are seeing this as a fantastic opportunity to build more resilient businesses with clients who trust and respect them and the vital resource they really are. There wouldn’t be many who didn’t breathe a sigh of relief that the FSI recommendations of dropping all insurance commissions other than the level option didn’t get approved…although the industry has been warned in no uncertain terms that this will be reviewed in three years time, if the new hybrid model doesn’t result in better alignment of the interests of financial firms and consumers.

In July I had the pleasure of working with Zurich and some of their key advisers, delivering some workshops that helped to flesh out what the impacts of the new Life Insurance Framework will be on individual businesses. Then in September I travelled the country with the AFA on their Facing into Transition roadshow, and shared some early insights into how advisers can handle the upcoming changes. In case you haven’t seen it, I also wrote an article about the likely impacts of the changes on your business.  On the AFA roadshow, we released two free resources that we are happy to share more broadly.

As I made the point about the importance of understanding what it costs you in your business to deliver services to clients, I shared a simple worksheet that covers the steps that most businesses take to deliver advice to a new client. I suggested to all that they make note of the length of time it takes their team to deliver the services for a ‘ typical’ client, then apply those against the appropriate hourly rates in their business, to determine an estimated minimum recoverable amount that they want to be receiving for each client. If you’d like to play with the worksheet you can download it here. Note that this is just one of the many steps you will want to take – in fact I highlight the shortcomings of this action as well as the purpose of it in this article.

I also shared a worksheet that we developed in conjunction with Zurich, that will help you to consider just how ready you are, and what areas you might need to work on to improve your future success. You can get a copy of that here.

I delivered two sessions at the AFA Conference last week, in conjunction with three advisers who are in various stages of introducing fees for their risk advice. They were great sessions filled with insights, humility and honesty and I’m looking forward to adding their insights to my next book, ‘Worth Paying For’, which is an extension of our Pricing Advice program that focuses on the very complex elements of pricing insurance advice. I’m excited about this one – it will live up to it’s byline of ‘Unlocking the value of your risk advice service to ensure the successful future of your business and your clients’. I’m hoping to go to print this side of Christmas. We’ll also be enhancing our online Pricing Advice software to better incorporate risk and launching some programs that will help you to make this incredibly important evolution in your business.

We’ll let you know when the new book is launched, and in the meantime the best way to get living proof and detailed insights into how others are charging for their risk advice you can still access the Insurance edition of our Adviser Pricing Models Research Report.  As always, our coaches are ready to help you if you’re wanting to engage us privately – all you have to do is reach out!

Sue Viskovic
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Sue Viskovic CFP is the Founder of Elixir Consulting; a proud mother of four; a sought-after speaker; a business coach; and author of a number of books and programs designed for advisers. An active contributor to, and advocate of, the financial advice profession, Sue is passionate about the important role that quality advice can play in society.