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When success doesn’t equal satisfaction

Just 115 advisers – 3% of the total adviser population – were responsible for 25% of all new life and risk business in the last financial year, and that top 3% were also the least satisfied with their insurance providers

Wednesday, August 31st 2011, 9:00AM 4 Comments

by Benn Bathgate

The inaugural Beaton IFA Classification 2011 survey combined the adviser databases from all the country’s insurance providers to create a comprehensive snapshot of the insurance advice sector between April 1 2010 and March 31, 2011.

“We knew from the market perspective how much new business each adviser had placed across the industry, how big their lapses were and the size of the book at the beginning of the year and the end of the year,” said Beaton director of research Rebecca Sheils.

The survey then divided the advisers up into four groups, A, B, C and D, each contributing 25% of new business revenue.

“In the A segment the top advisers, 115 advisers, 3% of the total adviser population, contributed 25% of new business revenue. The B advisers, 258, 7% of the adviser population, again contributed 25%. C advisers, 514, 13% of the adviser population and the D advisers, 2928, 77% of the adviser population.”

Sheils said the survey also profiled each sector individually, finding the top A and B ranked advisers dealt almost exclusively in life and risk products, while the C’s and D’s tended to be 70% life and risk, the remaining 30% of their business being health, wealth and mortgages.

Sheils said the survey was also able to identify some common factors among the top ranked advisers. “These A advisers tend to be top notch advisers, we’ve got the highest proportion who are AFAs, the highest proportion who are qualified, almost all of them are members of an industry association and most of them belong to a network dealership.”

Other factors Sheils said the A advisers tended to share was a focus on their professional lives, their individual brands and their reputations. They also tended to be non-aligned and with a greater focus on education. “They’re the ones going out getting qualified, they’re the ones that don’t need to be qualified to do what they do.”

Worryingly for providers, this top echelon of advisers was also the least satisfied with the service they receive. “They tend to have high expectations in terms of service,” said Sheils. “Probably because they’re providing top-notch service themselves, they’re quality individuals, so they have a very high standard regarding the service they receive.”  

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

« Insurers’ consider adviser cull over persistency fears Life insurance payouts hit new $1 billion high »

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Comments from our readers

On 1 September 2011 at 10:38 am Graeme Lindsay said:
Whist I am no longer a full-time life and health insurance adviser, I am aghast at the first two paragraphs of this article!!!

If, as it suggests, the insurers have disclosed individual advisers' annual production, size of book at start and end of year and persistency rate to Beaton, I suggest that there has been a colossal breach of confidence by the insurers!

I invite them to deny that this unauthorised disclosure has taken place, or to issue a serious apology and consider compensation!
On 1 September 2011 at 12:48 pm Hugh P T said:
I could not agree with G.L. more. The Professional Bodies have been conspicuously silent have some explaining to do to justify their existence.
On 2 September 2011 at 7:07 am Ron Flood said:
Why is it that every time a sensitive issue arises someone demands that Professional Bodies make a comment to "justify their existence".

Hugh, if you don't want to belong to a Professional Body, don't.If you do belong to one then resign as other members will be better for not having your negative influence. I personally belong to two bodies and to me,the value I receive from both already justifies their existence.

Graeme,I agree with you that this is a serious breach of trust by all insurers. They would have had to give the personal details of each individual adviser who participated in the survey in order to match an individuals personal production with each company.

As a result of these actions, I will no longer take part in the survey's and I suggest that other advisers seriously consider their stance in future.

On 7 September 2011 at 11:03 am Warren Duff said:
Like Graeme L I have been around for a long time so it wasnt hard for me to find the clause in the proposal declaration which is signed by the insured or owner. "I acknowledge that the personal information collected and held by (name of insurer) is provided and may be held, used and disclosed by (insurer) etc etc. I cannot see where such personal information can be submitted to another party such as research organisations so based on the story so far the insurers have acted Ultra Vires.
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