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Advisers No Dinosaur - Channel Complexity Here To Stay

One UK insurance sales business has created a storm by placing a "financial adviser" in an exhibit with dinosaurs. But they are wrong; it seems hard to argue that the role of advisers will shrink: rising complexity and legal requirements appear to be entrenching advisers, not eliminating them. 

 

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. 

Also, around the world, advisers are being legislated into the financial lives of millions. Here in New Zealand only an AFA can provide personalised advice on KiwiSaver, for example, and is on record as saying it wants the involvement of advisers in complex financial decisions. 

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. 

 

 

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