“Perfection is attained by slow degrees; it requires the hand of time”
— Voltaire, Head of Practice Management
One of the advantages of reviewing a lot of advice, is that we gain a broader perspective of advice (quality and process) than most people.
So we know, for example, that advice quality has been improving year on year despite all the regulatory change.
We also know, for example, that most advisers want to do better than compliant but often don’t know where to start.
In our experience, risk advice is often problematic for advisers. When it’s done well, it’s often exceptional; when it’s not, it’s not.
The good news is the effective techniques we see used by the best risk advisers, can be easily implemented by any adviser (and even applied beyond risk insurance).
After reviewing over 16,000 files, we’re confident in identifying six common techniques and strategies that separate the best from the rest. In our experience, here’s what the better advisers do:
1. They listen to their clients’ needs and concerns.
The first step in providing good life insurance advice is to understand a clients’ relevant personal circumstances – their unique details, objectives, preferences and needs.
Too many advisers rush the discovery process but the better risk advisers take the time to make this (or make this seem like) an organic process instead of an obstacle in the way of a product recommendation.
It’s a simple and profoundly effective approach; by listening carefully to their clients’ concerns and asking relevant questions about their financial situation, health, and family history, they tailor their recommendations to their clients’ specific situation and build a logical and emotional connection between the clients’ needs and the right cover.
2. They Explain the different types of life insurance policies.
We understand the arguments about commoditisation and lack of differentiation, but there are differences between life insurance policies and each has its own benefits and drawbacks.
Even pre-Code, the skilled risk advisers explained the various options to their clients and supported them to make their own informed decision about the cover they needed. To be clear, these advisers didn’t function as order-takers, but nor did they dictate options. Instead, they guide (and educate) their clients and give them the space to realise the differences between term life, trauma, total and permanent disability and income protection.
3. They compare quotes from multiple insurers.
We’re often told “there is no other insurance option” but, spoiler alert, most retail consumers have a range of broadly similar insurance options available to them. Branding aside, most consumers are often incapable of differentiating their options and, where they’re capable of doing it, they’re entirely disinterested in doing so.
The better risk advisers live Standard 5 and take the time to present options to ensure their clients understand the advice and the alternatives available to them. These advisers understand that life insurance premiums can vary widely among different insurance companies, and that price is a poor indicator of value, so they shepherd their clients’ through quotes from multiple providers: helping them compare and curate their options to be reasonably satisfied about their choice.
4. They recommend riders and endorsements.
In addition to basic life insurance coverage, we’ve noticed that the better advisers tend to recommend riders or endorsements to provide additional protection for their clients’ specific needs.
For example, they’ll recommend a long-term care rider in case they become unable to care for themselves or a child term rider for their dependants until they reach a certain age. They use riders strategically to manage costs and avoid duplication.
5. They encourage their clients to regularly review and update their life insurance policies.
We see that some advisers treat Life insurance as a “set it and forget it” financial product, relying on automatic indexing and client anxiety to ensure ongoing appropriateness.
The better risk advisers don’t. Instead, they actively engage with their clients at, and before, renewal. These advisers understand how important it is for their clients to review and update their policies regularly to ensure that their coverage remains appropriate and suitable. This might involve adjusting the amount of coverage, switching to a different policy, or adding riders or endorsements.
In fact, these advisers tend to schedule ongoing contact with their clients to provide them with ongoing support and guidance (and, coincidentally, reminding them to review (and increase) their policies periodically).
6. They provide ongoing support and guidance.
Finally, the better advisers appreciate that providing good life insurance advice doesn’t end when their clients signs an application, they remain present, and attentive, throughout the life of the policy.
This might involve answering questions, helping with claims, or providing advice on managing the policy but their engagement seems to demonstrate a genuine interest in helping their clients get the most out of their life insurance coverage.
In reality, the secret to providing better life insurance advice simply involves listening to your clients’ needs, explaining the different types of policies, helping them compare options, recommending customisation, encouraging regular reviews, and offering ongoing support and guidance.
Simple well-documented steps help these exceptional advisers to ensure their clients make better informed decisions about their life insurance and obtain the certainty and peace of mind they need.