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How sales incentives can distort the advice of insurance companies

I don't like this headline, but the trick with this kind of information is to try and figure out why it was written, rather than spend ages grumbling about how wrong it is. In fact, this is the headline for a long-form essay on conduct issues in life insurance. While I do not agree with some of the things in the article, it is overall a good introduction to the subject and covers it well. You should take a look. Click here to read it.

Now back to our challenge - that for many people insurer and adviser are synonymous. Read this quote and absorb it again:

'Life insurance providers are under pressure to disclose sales incentives, which can affect their advice and are banned in some countries. But the industry is resisting.'

I added the emphasis on the word 'their' myself. Plainly the insurer is seen as being responsible for the advice that an adviser may give. For some, they are, for others, of course they are not. This is a significant issue for insurers and advisers that wish to provide excellent experiences for their clients. Being clear about the service you provide, and what you are (or are not) responsible for, is essential to managing your advice and conduct compliance obligations.


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