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Authority Documents - What’s too far?

Recently, I've seen some pushback from providers wanting their documents for authority purposes, which is painful.

Wednesday, October 4th 2023, 9:09AM 4 Comments

by Jon-Paul Hale

We have had enough of a challenge keeping up with the forms from insurers already, adding individual provider authorities and changing documents rather than the general forms and letters we have been used to, and it becomes a bloody mess.

With the Southern Cross issues with communication, it's even worse because you have to read things with context to what was there in the past, making the job twice as hard to keep up.

As I pen this, I am tracking the following documents, brochures, and forms for each of our active providers. (Ignoring the banks and direct providers as they don't work with advisers)

* ACC has a whopping 313 forms and documents; nuts! (including historic levy tools)
* Accuro 61
* AIA 254
* Asteron Life 132
* Chubb Life 102
* Fidelity Life 100
* nib 92 (not including the new products)
* Partners Life 204
* Resolution Life 86
* Southern Cross 159

On average, including ACC, that's 150 different documents we need to be across per provider. That does include the providers existing authority docs multi-provider advisers largely ignore.

If we drop out of ACC, as most would say, they're not captured under FSLAA, and it's excluded explicitly in FSLAA, which drops the average number of documents per company to 132.

For just insurers, that's 1,190 different forms, documents, brochures and policy wordings to keep track of. And that's just the current stuff.

My library of current and historic provider docs and updates is 26,205 documents... And I know the pre-merger Sovereign book had some 15,000+ different products and 45,000+ different policy wordings.

The document load on our industry and the advice we give is massive, so anything we can do to reduce this is good?

Sticking with current and on-sale documents.

If we look at the medical insurers, their average is 104 documents per company.

All medical providers, adding AIA and Partners Life, that jumps to 154, more than the total average with ACC!

Life insurers without medical-only providers, it's an average of 146, including Resolution Life. Without Resolution Life, it's 158 per provider, as Resolution Life doesn't have the new business load the rest have.

It's no surprise that advisers have struggled to get the right form or document done, and with the more recent legal department looking for job justification, it's only going to be worse.

My most complex client has products with six providers across eight policies. Their covers cannot be moved or consolidated due to existing medical conditions or restrictions with providers' internal movements.

Based on every provider needing their own authority or change forms, we would need to have a minimum of 6 forms completed and signed just to get the picture of this client. And they aren't the only clients I have like this. Some providers have per-policy forms, too!

At that level of the paper, clients will just freak out and not get what they need to be done.

It's bad enough with your typical application form without this. Even accountants and lawyers who are used to forms and documents are pushing back on what insurers have been asking for.

I have one poor client trying to save $800 per month on a policy that they are struggling to get their trustees to sign off on, and the trustees are professionals in the CA/Legal space!

Yes, this simple task is too difficult for trained, qualified professionals. This is an interesting issue, given that financial advisers have not had the document training that chartered accountants and lawyers have had. Yet here we are!

I often refer to the 12 Tasks of Asterix, a comic book from my school days if you don't know. One of the tasks in there is the epitome of the crap we're dealing with, and no one wants to tackle it.

Puzzle Palace was introduced to me by one of my advisers as a BDM; when referring to Insurer HQ, they are not wrong!

The whole point of the new rules is to make financial advice for clients safer and more accessible. Clearly disclosed and managed with the expectation that it is easier for clients to engage with financial services to access and hold the right products for them.

At this point, it's not, and it is getting worse.

Insurers have an obligation to be easy for clients to work with, which has a natural translation also to be easy for advisers to work with.

When was the last time a senior manager in an insurer stepped outside and tried out their own customer service?

Very, very few is my expectation. If they had to endure what we advisers are enduring, I suspect it would change in a heartbeat.

One provider is six weeks to get a change of address or payment authority loaded; another is 8-10 days. Another one is that their claims team is responding better than their admin teams!

Another confirmed completion of changes in November 2022, for what we thought was all of the changes requested; nope, that was just the changes requested in July 2022; we're still waiting for the September 2022 changes to be done!

And that's not getting to my primary gripe for writing this epistle!

Bless their hearts, Southern Cross has decided that you have to have their form for change of servicing and, I suspect, now information access. I'm not sure because they consciously decided not to advise their advisers that this was changing. (I have this in writing from Southern Cross.)

Way to go with respecting the relationship with advisers; you missed that one by a mile!

However, that's not the primary issue, but it's bad enough!

My issue is once I calmed down and read the required form, it requires clients to sign off an extensive authority enabling the adviser to access information and make changes to the policy far in excess of the standard administration expectations we have.

Frankly, it steps over the reasonable line for clients and shouldn't be used as it stands. (It's dated 2011)

Typically, the approach is to have three tranches of information access:
* Typical information authority, existing policy and application access
* Typical change of servicing authority, the above and the client moves across to your agency for servicing and communications that include the adviser.
* Personal information authority, which elevates information access to include medical and financial information not provided for under the application and servicing level of access. This is typically used for claims and access to medical information.

We're seeing providers adapting their processes to the lowest, dumbest advisers, solving issues where they can't get their crap together, so we all get imposed with the increased BS.

It's like the recent AIA agency changes; they trust a new adviser to get it right when requesting to join your FAP without requiring the FAP to sign off. At the same time, they insist on us copying in the client when adding Airpoints numbers to a policy because we can't be trusted not to put our own Airpoints number on the policy.

Providers need to deal with the bad apples and incompetent in the way they should, push back, and don't apply it to the rest of us; it's just tiring!

This brings me to my point: Should insurers insist on their forms if their forms provide access far beyond what is required for you to do your job?

Because that access comes with both liability for the adviser and the FAP on the possible changes that could be made and information privacy as a direct result.

As a larger FAP, are you comfortable with people downstream taking shortcuts to make changes that affect people's coverage or increasing your potential privacy exposure and increased costs of managing information?

Because that's what's going on when we become beholden to provider authorities that are more expansive than the needs we directly have.

I do want to know your thoughts on this, as providers riding roughshod in these ways will make advice businesses expensive and top-heavy to operate.

What do you think?

Tags: Jon-Paul Hale

« Providers need to do the right thing when nobody is watchingBurning down the house »

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Comments from our readers

On 7 October 2023 at 12:03 am Skeptical said:
CoFI is only going to increase this burden by the way.
On 9 October 2023 at 2:40 pm Andy the adviser said:
JP - I sympathise with you.

It is the same in the lending space. There is ONE law, ONE set of legislation, yet EVERY bank has interpreted it differently, and as such, each bank requires a completely different attestation, declaration, and client authority, all to achieve the same client objective - a better outcome for clients. This requires a whole lot of repetition (and unnecessary paperwork)

Surely things could be made a lot easier if we simplified the process, and started to standardise some forms.
On 10 October 2023 at 1:38 pm JPHale said:
@Skeptical I fully expect that it will, part of the motivation to cover this off now. Because it will only get worse.

Advisers will have to lump it if we're not organised and motivated to push back on it when it happens too.
On 10 October 2023 at 1:49 pm JPHale said:
@Andy I fully agree, everyone operates under the same laws for permission and privacy and every branded form for information and servicing purposes is basically the same with their logo slapped on it.

The challenge is to formally do this; we'll end up with a 5 page document needing 20 signatures to satisfy all the providers legal and BS... Camel; Horse designed by committee does come to mind.

A cleaner way, have the providers state the wording requirements they need covered off, and let the advisers provide what's required in reference to their business needs, and you'll land somewhere about right.

I don't want default authority to change people's policies, and nor do I want my team to be able to, yet, that's what the SX authority presently allows. Madness!

Underwriting forms, insurers have quite different requirements, less applicable to standardise than lending, but then they did sais that about lending at the time.

One thing that gets pushed back is the providers people having to deal with different forms and different formats. I get this, that does make it harder for their staff. And it also makes it harder for them to automate things with document recognition systems too.

There are pros and cons to standardised and custom forms and documents. End of the day we need to keep the client in mind and make it easy for them. Presently it's not.

And that client I referenced with the multiple policies has just done their review and adjusted all of their cover, that ended up beign 8 different letters for insurers.

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