A cure for under-insurance?

Out in adviser land there are plenty of changes quietly going. I’m not talking about regulation here. Rather there seems to be plenty of movement going on amongst the different disciplines of advice. What I refer to here are mortgage broking, insurance and investment advice. There is no doubt that the former and latter are really struggling. With such a massive slowdown in the housing market the easy deals for mortgage brokers have disappeared. The staple diet of brokering a deal and collecting commissions is disappearing. (Partly because there are far fewer house sales than a year ago, but also because banks have slashed commissions). Now brokers have to look to new income streams and become more advice orientated. There are a number of options brokers can look to for new income and these include advising on home equity release, commercial lending or life insurance. The HER market has slowed, but has a good future. The commercial business is quite specialised, but still a healthy market. What is interesting is that a great debate is developing as to whether mortgage brokers can become risk advisers. I give credit to some of the life companies, such as AIG and Sovereign, for trying to help brokers expand their businesses. On the other hand there are plenty of voices which suggest it will be very hard for brokers to make the shift successfully. This is something which we will watch closely. Added to that though is news that a number of investment advisers, who have experience with life insurance, are moving back to the risk fold. There are stories that risk advisers who sold Blue Chip are now back in the life insurance market. (This comes from a life company itself). It’s all great news for life companies as they may get to write lots of new business. Also it may go some way towards this much-talked about problem of under-insurance.