Financial planning and insurance advice

Wednesday, January 10th 2018, 10:27AM

by Russell Hutchinson

Nigel Tate recently commented on the foundation of the new member advisory committees for FANZ that he would like to position financial planning as a distinct process, separate from other advice strands. He might be right, and it’s not just for investment advisers to ponder it.

Say the client needs advice on a financial decision, but has nothing to do with a financial product you could sell. It is possible that the most valuable stuff you talk to people about isn’t anything to do with insurance, companies, types of cover, or premiums – but the stuff about how this fits into the lives of your clients. Perhaps they are talking to you because when you last met, you made good sense helping them with that stuff. So then, from nowhere, they hit you with an odd question, like:

“I’ve just inherited $50,000, I’m 32 and I’m wondering about a career change, any ideas?”
“I’ve just been made redundant, should I look for a job now, or take a quick holiday?”
“My partner has just got the opportunity to buy into her boss’s business, can you help us work it out?”

Each of those questions is about risk and reward, and is definitely part of the context for an insurance planning discussion. But it is bigger than that. Advisers looking at insurance in that context tend to have the best view of how it all fits together. So, if you want to talk with clients about the wider financial context, go for it. That’s not just something investment advisers do, creating goal-based financial plans and budgets of wonderful complexity. It’s how to bring the financial component into your life-decision making. It’s where financial advice overlaps with life-coach. Of course, you will need to ensure you are competent to help them, but I bet there is a lot of work to be found in that territory.

On the other hand, if what you want to do is specialise in insurance, that’s okay too: plenty of good business can be done there. In fact, probably the majority of insurance business will be written in this segment. If you do choose this focused path, don’t be scared to suggest that clients get some good financial planning advice too, when it’s needed. My GP is always happy to refer to a specialist, and he writes a good referral letter.

A good referral letter can still help your client a great deal – even if the client doesn’t take it up. Write to the adviser you intend to refer the client to, with a good bit of detail. You might suggest an outline of the possible engagement, and share some details from your file (with the permission of your client, of course). In so doing, you set the tone for professionalism. For you, for your client, for the other adviser.

Tags: FANZ financial advisers Insurance Advisers investment Nigel Tate Russell Hutchinson