Quotemonster is now quoting the pricing for Income Protection to Age 70 benefit period for those providers who offer it. When quoting Income Protection insurance you can select it in the list under the 'Benefit Period' the drop down box.
For two sharply contrasting views of the same data from ACC take these two headlines:
If you read each article (NBR here, TVOne here) you will appreciate that these views are based on exactly the same data. What's missing is a restatement of exactly what ACC is for, and therefore the context to those numbers.
A couple of weeks ago the article that got the most commentary was all about the labelling of advisers - Dr. Michael Naylor got some great coverage for the concept of labeling some advisers "Restricted" which is a term employed in the UK for advisers that are, well, restricted, in some way - usually by the range of products they can offer, but also sometimes in other ways.
This week there is a good article on goodreturns which focuses on how limited the advice could be in another way. This is the crucial quote (but you should follow this link and read the whole article, by Susan Edmonds).
"After all there may not be much difference in effect between ‘I recommend this product to you in your circumstances’ - personalised advice, ‘I recommend this product generally to all my clients’ - class advice, or ‘here is some information which recommends this product’ - no advice.”
That may be the case. It may also be that almost every adviser could not offer a whole universe of product. But I think there are three pieces of information critical to a client getting a fair idea of what their adviser is doing for them:
Knowing how the adviser is getting paid (fee, commission, how much)
Knowing which solutions the adviser is leaving out (can't offer, versus which aren't appropriate)
Knowing whether they are considering all my personal circumstances
Building a brand is sometimes seen as something only a huge company can undertake.
The genuine advantages of incumbency and market share are real - but not as big as is sometimes assumed. Perhaps because of my background I am more optimistic than that. I have often worked for challenger brands, and built them up to become something much bigger, first at Sovereign, then at Quicken, and more recently with Quotemonster.
You can build up your brand as well.
Now, obviously, Quotemonster is not Spark, or Apple, or Coke. But I don't need all those people to be able to find Quotemonster, or Chatswood, for that matter.
This excellent blog post by marketing guru Seth Godin explains masterfully how definining your target market carefully may be the first step to working on your brand. He calls it "Famous in the family." Link.
Use two criteria to define your market - one will be about what you do, and the other will define more carefully out of the whole world of people the group you are most likely to help first.
Later you have to explain why you are special, and when you have done that, we can talk about some of the actions required to make your reputation grow.
In another example of the limitations of direct sales a company in the UK has been ordered to pay redress for misselling complex products. This statement is telling:
In a statement, First Direct told the newspaper: “We have carried out a review of the investments that some of our customers hold or have held on our self-select investment platforms and have found that some of them should not have been available.
“This is because they are defined as ‘complex’ and not appropriate for a self-select investment service without assessing a customer’s knowledge and experience for appropriateness. We are currently in touch with the customers affected and are working with them to ensure they will be compensated for any loss as appropriate.”
Just a reminder that we are out and about next week. Quotemonster is now two years old and is now the number one place to go for pricing and research. We are thrilled with this response and are committed to continuing to be your first choice.
As part of this we are holding another round of road shows in Auckland, Wellington and Christchurch. Ideal for you to attend if you are new to Quotemonster or if you are an old hand but want to learn about what’s new.
New Research tools (Business, IP Claims, Insurer Selector, Funeral Plan and Head to Head)
Policy Document Library
New poster - Why You Need Insurance: The Financial Facts
New quote options and products
Tips and tricks
The latest news on more than a dozen price and product changes since you last joined us
As always these sessions will be jam-packed full of good ideas and something to take away with you.
In a recent release from Southern Cross Travel Insurance (SCTI) they write about a spike in claims for sexual assaults abroad. The company have reached an all time high of five sexual assault claims in the last four months - the highest in the company's 32 years, who are used to just one or two similar claims per year.
These assaults have all taken place in Europe and South America with one factor in common - alcohol.
SCTI offers the following safety tips:
If you are travelling alone and going out for an evening, see if you can join in with an established group of travellers for added safety, at least until you become more familiar with your surroundings.
Plan how you will be getting back to your accommodation – check what time public transport finishes, or pre-arrange a taxi.
If you are having a drink in a bar, never leave it unattended. If you are with a friend, ask them to hold it while you go to the toilet or to dance. If you are by yourself, leave it and purchase a new one.
Only accept drinks from people you trust. If you accept a drink from somebody you have just met, or don’t know well, watch as the drink is made and served directly to you.
Go for bottled drinks that you have watched the bartender open, rather than drinks served in a glass.
If your drink has a bitter, salty or strange taste, don’t drink it.
Regular readers will know that I am a supporter of online services, and see direct sales as a valid way to buy many, many, products - but I am a committed supporter of advice and advisers. I am also closely involved in Quotemonster, where we say "It's no dinosaur."
I was asked about this recently by a journalist. I pointed out that although many people get their first insurance policy from a bank, virtually no financial advisers would sell a policy as limited as most direct plans are to a client. Clients will get a better policy in almost all situations from a financial adviser. The one they bought direct was okay, probably fit for purpose, and much better than nothing, but can usually be substantially improved on. Advisers do that.
Add to that the world of online comparison is coming under increasing regulatory scrutiny, and it looks like the distribution model for the future simply is not binary where one channel wins and another loses. The world is more complex. Different groups of clients will continue to want different services depending on their situation, ability to pay, and the regulatory structures applied to different kinds of products / advice processes.
I was glad to see a positive story about the FMA relationship with financial advisers. Although there must be a certain tenor to the relationship between a regulator and industry, it would be nice to think that it can have more of a community constable than a 'dawn raid' feeling to it. This piece suggests the former.
One thought to bear in mind, however, is that it suggests the FMA has a view of what financial advisers do that is somewhat different from what most financial advisers actually do. The example of explaining risks and advantages of more complex investments is telling. It is telling for what it is, and what it is not. It is not about the many products that are sold before clients become wealthy. It was specifically about investment risk. Link.
Today the Reserve Bank has released a video explaining the functions of money and the Reserve Bank's role in producing and protecting it. The 'What is Money' animated video is four minutes long and has arrived just in time for Money Week. You can find it here over on the RBNZ website.
This UK study has some fascinating insights into the apathy around insurance. The comments of one person quoted feel familiar, so I suspect there is much similarity with the situation here. Link. By Thomas Smith at Cover.co.uk
Last week we published a slide show on the reasons why adviser businesses often struggle to grow. It turned out to generate a lot of interest online and has been viewed quite a few times by Twitter and Slideshare users. In case you missed it, here it is.
First: thank you to David Williams who hosted the last Cavalcade of Risk. If you missed it you can take a look at this link.
What is the risk you will have a long hospital stay? Does that probability depend on whether you are assigned high quality or low quality nurses? The Healthcare Economist investigates. Jason Shafrin from Healthcare Economist explains.
Claire Wilkinson at the Insurance Information Institute writes unmanned aerial vehicles (UAV), otherwise known as drones, appear to be moving closer to commercial application, and property/casualty insurers are getting involved. On the one hand, insurers are looking at ways to use this emerging technology to improve the services they provide to personal policyholders, at the same time they are assessing the potential risks of commercial drone use for the businesses they insure. Once regulators develop appropriate rules and UAV use takes off in the U.S., insurers are ready to support this emerging technology both as risk takers and risk protectors.
Henry Stern over on InsureBlog writes about Ebola Insurance. Does *your* insurance cover Ebola-related expenses? InsureBlog takes a look at how insurance might (or might NOT) pay for treatment and medical evacuation.
The ISO has released its latest annual report, which shows the scheme resolved its highest number of complaints since 1998 – a total of 300 complaint investigations and 3215 inquiries. Susan Edmunds explains over on Goodreturns.
Michael Stack at Amaxx Workers Comp Resource Centre writes "From time to time I like to share a file I reviewed on this blog. Not only to point out the good but also the bad. Most of the time these claims have various red flags, and they seem quite obvious that the claim was not compensable. Or on the opposite side the claim was very direct, very compensable, and ended up being very high exposure due to normal factors. Generally it is nothing new to the typical person involved in everyday claim activity."
The recent release of the biennial Oregon Premium Ranking Report for workers’ compensation may tell us as much about our future as it does our recent past; and that money saving reforms aren’t everything they are cracked up to be says Robert Wilson from Bob’s Cluttered Desk.
The founder of Cavalcade, Henry Stern, is participating in the American Cancer Society Making Strides for Dayton walk this Saturday (18th) which raises money and awareness for breast cancer. Head over to his fundraising page to show your support. We have recently done work on this subject here in New Zealand and found a very broad range of cost estimates for an uncomplicated mastectomy - which underlines how necessary this funding is.
New Zealand Contributions
Tony Vidler from Strictly Biz explains how to show your value to a client in 10 seconds. One of my favourites is a very simple picture that anyone can scribble on a cocktail napkin in 10 seconds, which is great. What is even better though is it captures the essence of the value that a professional brings to the equation for a client in such a way that a client can get it immediately.
Regan Thomas at WealthDesign has been writing and offers two good posts to attract your attention. The first asks "What Mum doesn't want the best for her kids?" and it quotes some good data from the UK insurer Aegon on the aspirations mothers have for their children. Link. The second featured post is one which should be important to most of the contributors and readers of this page: "Good advice is not only free, it pays" so do take a look at this link.
I offer a recent piece on the dangers of relying on perceptions of insurance price - as they are often wrong, and why they are wrong - from the industry site goodreturns.
Asteron is the latest company to put a greater focus on group business alongside individual life business. Last year Partners Life appointed a development manager to this market segment. Now Asteron has started advertising their group offer on goodreturns - the advert is shown below.
News from our Australian colleagues that most advisers use fewer lenders: a clear majority use about three lenders regularly, a significant minority (about 1 in 6) use just one lender for most clients. Is that so bad?
No, not necessarily. After all, most customers understand the trade-off and often choose the convenience of fewer provider relationships in spite of some off-setting costs. Advisers will experience that as well, and some will make the choice to have fewer relationships. That may shock those of you who are committed to offering large universes of product to your clients.
What does it mean for panel providers? It is obvious that groups, the main entities putting panels together, still need panels, and broad panels will tend to be valued. That's because although most of their members may only use one or three providers from, say, a range of twelve, their choices will vary.
So at the client and adviser level panels aren't used extensively, but at the group level they will be. The key to an effective panel will be how it is selected and managed. Objective measurement and transparent processes for inclusion in the panel and recommendation are now vital to managing conflicts of interest. If you want to discuss those processes, drop me a line to get further information.
If the answer to that question seems to be an obvious 'no' then you might wonder at how the UK financial services industry seems to have found itself in that position. Link. Those contemplating advocating for a UK-style Money Advice Service should think harder about that situation.
I think our own Commission for Financial Literacy and Retirement Income do a better job now with their current brief.