Rob Stock has a great piece on the value of advice. Do check out the full article at the link here, but I have also pulled out some quotes that illustrate the differentiation available within advice contexts.
"Within 30 seconds an independent insurance adviser identified Dion Knill how to trim 30 per cent off his life insurance premiums without reducing his cover."
This is a tough one - after all, advice isn't all about price, but the willingness to do a comparison tends to be a hall mark of a full service adviser, and acts as a major proof point for the client. They are impressed when advisers are happy to engage in the pros and cons of different solutions, and, as the article progresses, you can see that the discussion broadens out later on. Many banks do not give their staff the ability to produce fast comparisons - fearing that comparison invites switching. It doesn't need to, that's kind of the first use case, but overwhelmingly it is really about demonstrating that you are conversant with the market.
Much of the savings turn out to be in the form of discounts and benefits from an additional service. I feel that proves my point about comparison. This adviser was creatively repackaging a basic life insurance contract with a wellbeing service. The client obviously got on board with that because they achieved some goals and got some extra rewards:
"The savings came from applying a multi-policy discount, which he had not been getting, and by joining the Vitality health scheme run by AIA, which bought Sovereign from ASB's parent company in 2017 in a $4.15 billion deal, and took over its policies.
“In the last 87 days I have received about $100 in Airpoints, and 15 per cent off my insurance premiums (through the Vitality scheme), and I will keep saving money based on my fitness levels. None of this stuff has been pointed out to me over the last three or four years,” Knill said."
I can appreciate why ASB did not offer the service - many full-service advisers also choose not to offer AIA Vitality - but different advisers are welcome to package their services in different ways. That can have a big impact, especially on smaller policies, which are more common in a bancassurance context. In this case it wasn't a simple price comparison plus switch. In fact, it seems like there was probably no switch at all, but the addition of some services, and a powerful brand story about the value of full service advice.
I felt it also underlined a consequence of the place that legislators have drawn the line between no-advice and advice. Many bank services are categorised as advice within the meaning of the law, but there can still be a large difference between the advice offered by a full-service adviser and a low-service one. That's something that Cecilia Farrow talks about in her comments near the end of the article. It is a place where independent advisers can really exploit their advantages: being agile, access to a wider range of tools and services, and creating new packages of value for clients on a truly individual basis. Instead of grumbling about the advantages that the 'big end of town' have, some small advice businesses appear to revel in the joys of asymmetrical competition.
Grateful thanks to the adviser who drew this article to my attention.