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Opinion: Advice counts - and you have to have a method

A company I was speaking to the other day were proudly showing off an analysis tool which they felt ‘gives us an advice process'. But we've all seen clever tools for identifying a need and working out how much cover is required.

Wednesday, November 18th 2009, 3:57PM 1 Comment

by Russell Hutchinson

This is a big part of an advice process, but it's the easy part and therefore doesn't even cover most of what is required.

There's why you need the cover - that is, which issues would affect you more than others and which issues are more probable than others. Some clever people have worked out how consumers perceive risk varies with the scale of the perceived risk - which explains why more people buy life insurance when they are more likely to get disabled.

That's a component of advice that these systems don't go near. But it's something most advisers have developed an instinct for as they have talked to hundreds of clients over the years. It's used whenever you make a prioritising decision on a risk protection proposal.

There's also how you choose a company - and while research systems can provide a good contribution to this debate, the essential glue is figuring out what is important to a client and then responding to that with guidance.

There's which particular product you select and making a set of product selection rules, then applying them with consistency in every client situation - again very rare. Some of the research systems have a go, but the approach is so clunky I have met very few advisers that even incorporate the results into their reports.

Add all that up and quite a lot of clever stuff gets done by the adviser ‘around' all the systems. But the systems could sure do with catching up so we can make it easier to record and prove the advice given.

« Opinion: Questions, questionsOpinion: Insurance needs variation »

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Comments from our readers

On 20 November 2009 at 10:31 pm Richard Pykett said:
As you say Russell – it’s a process. Try looking at E-Broker and the Planning Module... Full CRM/back office, data capture, needs analysis, market premium quoting and fully customisable client reports. A skilled (or even semi-skilled) advisor can create a full risk report and recommendations in around 45 minutes. The complete process is logged against the client for audit/compliance and despite looking daunting for some with more than one page to the report, when working full time as Advisors, we enjoyed a 95% success rate with the report and a 98% persistency. The biggest issue in our experience however, is can advisors be bothered in picking up the data in the first place, or is this just getting in the way of a sale?
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