Barbara McLean from Melbourne-based research house Plantech says that 10 years ago in Australia less than 10% of advisers used risk research tools. Now, post regulation, the figure is up at around 90%.
While there are no figures showing the take up of risk research tools in New Zealand, the number is (not surprisingly) much lower.
Also the choice is limited to three providers, PlanTech, Strategy Financial and Boss compared to about eight in Australia.
McLean says one of the reasons risk research tools gained acceptance is that they help advisers with compliance issues and provides a paper trial of the decision making process.
She says this has been vital when an adviser wants to switch a client from one policy to another. In Australia it is a “major issue” and can cause an adviser trouble if a switch is made, particularly if the new policy has fewer benefits.
She while risk research tools are useful to help advisers make product selections they shouldn’t rely on them entirely. “I don’t think you should ever fall into that trap,” she says.
Her comments are supported by Asteron managing director Sean Carroll, who says: “never let it be the only thing you use.”
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