2 October, 2019

Confirmation of Risk Adviser Numbers in Decline

Recent findings by Beddoes Institute indicate that whilst the decline in adviser numbers throughout 2017/18 was mainly among non-life insurance advisers, 2019 has seen the exit rate of both life and non-life advisers reach similar levels.

These findings stem from new analysis by Beddoes* which has revealed adviser numbers are declining by approximately 15 per day in 2019.

Compounding these findings, according to Beddoes, is the fact that there are few new entrants into the industry, and just as concerning is the discovery that 64 per cent of advisers exiting possess over a decade of industry experience.

According to Dr Rebecca Sheils, Director at Beddoes Institute, the sheer rate of exits, which far surpass the number of industry entrants, has the potential to create a substantial memory gap: “This memory gap has the potential to result in a loss of expertise and revenue that may take the industry years to recover from,” warned Dr Sheils.

The Beddoes research suggested much of the adviser exodus this year can be attributed to the new ASIC requirements of an approved degree, a professional year, an exam and the requirement to adhere to a code of ethics.

“Based on the data and general rhetoric surrounding the new professional standards, it seems that advisers who’ve built their livelihoods in this industry might be slightly wary – perhaps not only of re-treading old pathways with regards to training, but also of feeling like they have to metaphorically rebuild themselves to be able to remain in the same professional space they’ve embodied for years,” says Dr Sheils.

Whilst creation of continuous learning will benefit the advice industry moving forward, Dr Sheils questions whether there is a better way forward than making well-established and experienced advisers reinvent their professional standards wheel.

Have your say on how insurers can best support you by completing the Beddoes’ Adviser Experience Study. This Study has been in the market for 10 years and has supported insurers by providing adviser feedback on the services they offer to support you as a business, as well as your clients throughout the life of their policy. It also underpins the Client Service Team Awards (Claims, BDM and Underwriting Teams of the Year) that are part of the AFA Life Company of the Year Awards suite, as well as the inaugural Most Valued BDM of the Year Award. Simply complete the survey to receive access to over $3000 worth of business resources and potential eligibility to join Beddoes’ Most Trusted Advisers (MTA) Network. Click here to learn more and register:

https://tess.beddoes.com.au/adviser_registrations/new?source=risk_info

*Source: https://data.gov.au/dataset/asic-financial-adviser

6 March, 2019

Financial adviser ratings step up as trust deficit grows

by John Collett

Services that rate financial advisers will significantly expand their coverage of planners and the firms that hire them to give consumers more confidence that they are going to receive advice that is truly in their best interests.

Adviser Ratings will soon start ranking the financial planning firms who employ the planners and will individually rate more of the estimated 18,000 planners who give face-to-face advice.

The rater has recruited a panel of senior figures from the financial services industry and academia, including former Australian Securities and Investments Commission deputy chairman Peter Kell, to help ensure the revamped ratings process is rigorous.

21 November, 2018

AFA reveals as Consumer Choice Award winners

by Adrian Flores

16 November, 2018

OnePath named as Consumer’s Choice

OnePath has been named as the leading life insurer among consumer policy holders and claimants at the third annual Consumer Choice Awards.

Beddoes Institute, Founder,
Dr Rebecca Sheils

The Awards, which are a joint initiative of the AFA and the Beddoes Institute, named OnePath as the 2018 Consumer’s Choice, a title won by Zurich in 2017 and BT Financial Group in 2016.

OnePath was also named as the winner in the Best Turnaround Time category and was a finalist in the Best New Customer Service, Most Satisfied Customer, Best Application Process, Best Claims Staff and Return to Health and Wellness Awards.

ClearView was named as runner-up for the overall award having also won four awards – Best New Customer Service, Most Satisfied Customer, Best Application Process and Best Claims Staff – and was also named as a finalist for three other awards.

Other insurers to receive an award were AIA Australia for Value for Money and BT Financial Group for Return to Health and Wellness and Focus on Early Intervention.

Beddoes Institute Director, Dr Rebecca Sheils said through the awards consumers had identified insurers that had excelled over the last year, and the winners were based on the 2018 Beddoes Institute Policyholder Perceptions Study and Claims Customer Journey Study. These studies uncovered the life insurers that delivered product, service and claims experiences that were highly rated by life insurance policy holders and claimants.

The Policyholder Choice Awards recognise outstanding customer service and education, health and wellness programs, communication and other consumer-focused initiatives conducted by insurers, while the Claimant Choice Awards recognise outstanding service of IP, Trauma and TPD claimants, including claims processing, early intervention, support and holistic care.

Shiels said the leading Consumer Choice Award included all these factors and also looked at a wider range of weighted metrics across the entire consumer experience with a life insurer to produce the award winner.

AFA Chief Executive, Philip Kewin said the Association was pleased to bring the voice of consumers to the advice community via the Awards, adding, “The experience of consumers helps identify the insurers who are exceeding expectations, which in turn helps the industry as a whole to continue to raise product and service standards”.

Consumer Choice Award

• Winner: OnePath
• Finalists: ClearView

Policyholder Choice Awards

Value for Money

• Winner: AIA Australia
• Finalists: CommInsure, ClearView

Best New Customer Service

• Winner: ClearView
• Finalists: MLC Life, OnePath

Most Satisfied Customer

• Winner: ClearView
• Finalists: OnePath, Zurich

Claimant Choice Awards

Best Application Process

• Winner: ClearView
• Finalist: OnePath, BT Financial Group

Best Turnaround Time

• Winner: OnePath
• Finalists: AMP, ClearView

Best Claims Staff

• Winner: ClearView
• Finalists: BT Financial Group, OnePath

Return to Health and Wellness

• Winner: BT Financial Group
• Finalists: AMP, OnePath

Focus on Early Intervention

• Winner: BT Financial Group
• Finalists: AMP, ClearView

16 November, 2018

OnePath consumers’ top pick for insurance

by Hannah Wootton

OnePath has won the over Association of Financial Advisers (AFA) and the Beddoes Institute 2018 Consumer Choice Award, with ClearView coming in second place.

The award, now in its third year, was based on the findings of Beddoes studies of people who held life insurance via advisers and those who made claims, looking at the products, service, and claims experiences offered by providers.

AFA chief executive, Phil Kewin, said that the awards helped bring the voice of consumers to the advice community, which could then help raise product and services standards.

24 August, 2018

The money problems that dogged Aretha Franklin’s remarkable career

by Catherine Robson

The death of Aretha Franklin sees the loss of one of the most acclaimed and versatile singers of all time. The longevity of her career was remarkable, producing hits across blues, jazz, gospel and pop. A lesser known motivation to continue working for decades is clear from David Ritz’s terrific biography: her concerns about money.

Financial challenges might seem astounding given her talent, reputation and popularity. Generous to a fault, Franklin’s lifetime habit was to spend or give away all that came in, never making provision for the future. When big expenses arose, such as unpaid tax bills or medical care for her father, who was in a coma for many years, she would return to work to pay off her debts.

While few of us will be blessed with the sublime talent and earning potential of Aretha Franklin, many of us will fall into similar money traps. Here are some unhelpful money habits we might have in common with her and what to do about them.

Inability to trust

Franklin carried a purse stuffed with cash everywhere, even on stage, as she found it hard to trust anyone with money. While it can be challenging to know who to trust, some of the signs to look for in an adviser, are their willingness to openly discuss risk, transparency about their fees and their commitment to educating you rather than just wanting to make decisions for you. Getting references from an adviser’s existing clients is a great place to start. A terrific tool providing third party validation of an adviser is The Most Trusted Adviser Network , which lists some of the best advisers in Australia as rated by their clients.

Disorganisation

Franklin’s sister recalls visiting her home and finding a $20,000 royalty cheque among books and litter, completely forgotten. While she struggled to trust others with money, Franklin lacked a system to manage it herself. Increasingly there are terrific, inexpensive programs such as Pocketsmith that are easy to set up and give you the tools to see your real time net worth in one place, in addition to keeping track of income and expenses. There is a classic management saying that you “can’t manage what you can’t measure” and having good, clear data about your financial position allows you to feel in control of your own decisions.

Embarrassed by lack of knowledge

Many high achievers like Franklin feel embarrassed they are world class in their chosen domain, but lack expertise in their finances. The fear of looking foolish stops them from seeking help and costs them dearly by making sub-optimal decisions. Ironically research shows that asking for help actually makes you appear more competent and many of the world’s best investors have flourished as a result of their being unafraid of looking foolish in front of others. The next time you feel out of your depth financially, consider that the greater your willingness to ask a ‘stupid’ question, the more alike you are with the best investors, like Warren Buffett.

Failure to plan for the future

In the days since her passing, it emerged that Aretha failed to leave a valid will, opening her estate to the prospect of legal dispute. None of us like to think too much about our own demise, however failure to plan for the future can have devastating consequences for those we love. Putting in place a good estate plan can be one of the most valuable gifts we can leave to those closest to us, regardless of the quantum of our assets.

While work fulfils many needs beyond providing an income, Franklin’s biography postulates that her self-made money troubles were a subconscious motivator to keep working. If this is the case, we can be grateful that this financial impetus may have been responsible for some of her fabulous performances. However, we can also learn from her experience and get the help we need to ensure the more we work, the more we build a nest egg that facilitates genuine financial freedom.

Catherine Robson is a financial planner at Affinity Private and host of the podcast Success Stories.

12 March, 2018

Trusted adviser network born from pain and passion

by Johanna Roberts

For any long-term business or project to work, there must be a healthy dose of passion.

After all, business ventures will take years of blood, sweat and tears, and it helps if there is considerable emotional investment in the project to propel it forward.

Let’s take, as an example, The Most Trusted Adviser Network, which was established in August 2014 by the directors of the Beddoes Institute, doctors Adam Tucker and Rebecca Sheils.

Tucker is a medical practitioner who still sees patients regularly and Sheils is a registered psychologist with a PhD in clinical psychology.

What have those fields got to do with financial advice? Quite a lot as it turns out.

Both Sheils and Tucker understand how to care for others’ mental and physical wellbeing, but it was only when Tucker broke his back that he realised how vulnerable we all are.

“After that happened, I was unable to work for a patch and it was very difficult, as I didn’t have insurance coverage,” Tucker says. “I remember coming home quite late at night, it was 11pm, and seeing all of these bills and legal letters piling up in my letterbox.”

The shock of the bills, and Tucker’s uncertainty over whom to turn to for advice, made him realise that there were different kinds of unwell.

“As a doctor, I thought of suffering solely in the physical sense, of alleviating suffering and saving people’s lives,” he explains. “Then I realised that there was another kind of suffering, and these bills were causing me more anguish than the actual injury to my back.

“I thought, ‘Where do people go for good advice in these situations?’ ”

The experience provided the personal impetus for creating the trusted adviser network, a highly selective list that Tucker and Sheils’ Beddoes has audited.

“We wanted to list the best advisers and then for consumers to be able to easily find them,” he says. “That was the reason we started all those years ago.

Advisers can apply to join the network, but entry is far from automatic.

The institute requires advisers to send their entire list of clients from the last 12 months, who are then contacted to provide feedback on their experience. A report is compiled as feedback for the adviser. If the feedback is of a high enough standard, and the adviser meets educational and proficiency requirements, they’re admitted into the network.

Tucker has assessed thousands of planners over the last four years, and says the standard has been rising continuously.

“I think it is because in order to succeed in today’s industry, you really need to excel on a number of fronts,” Tucker says. “Because of the numerous structural and regulatory changes, planners really need to go above and beyond to stand out.

“They need to be exceedingly driven and organised, and this has made the best of the best get even better. There are some planners who are leaving the industry, but those who are staying are really excelling.”

Tucker is unequivocally positive about the future of the industry and thinks robo-advice is nothing for planners to fear.

“Robo-advice is standardised, its expression is so limited,” Tucker says. “An adviser is essentially helping someone go from A to B, but there are many different ways of doing that.

“I have seen some gorgeous businesses and inspiring people, all of whom have a kaleidoscope of business goals and ambitions, and advice comes in all shapes and colours.

Tucker also thinks the entire industry has been unfairly cast in a negative light by scandals over the years.

“We’ve lost the notion that advisers are just people, too,” he says. “The media are hitting advisers so hard at the moment. [There are about] 25,000 advisers in the country, who are often employing people in small businesses, so you’re looking at a 70,000 to 100,000-strong workforce.

“I think those facts are forgotten sometimes.”

20 November, 2017

Zurich sweeps AFA Consumer Choice Awards

by Sarah Kendell

Zurich has taken home the top gong in the Association of Financial Advisers’ second annual Consumer Choice Awards, which recognises life insurers who have achieved outstanding service ratings among retail policyholders and claimants.

The life insurer was awarded the overall Consumer Choice Award recognising excellence in both policyholder and claimant service, and also took out the Most Satisfied Customer Award in the policyholder awards category and the Greatest Gain in Advocacy award in the claimant category.

Using customer interviews and research, the awards assessed eight of the leading life insurers in the industry in terms of their service to both policyholders and those who had made a claim on their insurance over the past six months.

While BT Financial Group (BTFG) had dominated last year’s awards, the 2017 winners list saw a number of insurers emerge as top-rated for client service, including MLC Life Insurance, which took out Best New Customer Service in the policyholder category and the Focus on Early Intervention award for claimants.

However, BTFG maintained its winning streak in the Best Application Process category for policyholders, and in the Best Claims Staff and Return to Health and Wellness categories for claimants, while AMP picked up the Value for Money Award for policyholders and OnePath won Best Turnaround Time for claimants.

Commenting on the awards, AFA chief executive Phil Kewin said the initiative aimed to give consumers who held and claimed on life insurance policies through a financial adviser a strong voice in shaping the future of the industry.

“By recognising exemplary insurers, these awards help advisers and their clients as they choose income protection, trauma and total permanent disability policies,” he said.

Beddoes Institute director Rebecca Sheils, whose firm conducted the research behind the awards, said life insurers were increasingly prioritising where they could best improve their service to better meet their customers’ needs.

“This year marks an unprecedented level of inter-company engagement with the awards,” she said.

“It’s encouraging that so many insurers are pursuing excellence in servicing claimants and policyholders. It’s one thing to be good in certain areas but it’s an entirely different thing to be consistently excellent in everything and this is what we are starting to see.”

In other award news, Challenger associate director of group strategy Yash Sodhi has taken out the Financial Services Council’s 2017 Future Leaders Award for his ‘Smarter Super’ proposal, a four-step plan to ensure superannuation funds were better able to engage with members and meet their needs in the retirement phase.

Sodhi’s proposal included improving super fund access to member data in order to allocate members to age and income-based retirement cohorts, providing members with a tailored investment ‘glidepath’ which evolved with their circumstances, and redesigning annual member statements to focus on a member’s progress toward their retirement goals.

17 November, 2017

Zurich takes out AFA Consumer Choice award

by Aleks Vickovich

The AFA and the Beddoes Institute have announced Zurich as the winner of its overall 2017 Consumer Choice Award.

The accolade was announced at a ceremony in Sydney last night, recognising the performance of life insurance companies on servicing claimants and policyholders.  MLC Life, AMP and ANZ’s OnePath were named as finalists for the overall award.

In the Policyholder Choice Awards segment, AMP took out the ‘value for money’ category, MLC Life won ‘best new customer service’ and Zurich won the ‘most satisfied customers’ award.

In the Claimant Choice Awards, BT won three of the six categories, including ‘best application process’ and ‘return to health and wellness’ award, while OnePath won ‘best turnaround time’, MLC Life won the new ‘focus on early intervention’ award and Zurich won the ‘greatest gain in advocacy’ category, which ranks insurers on net promoter score (NPS).

“By listening to the voice of large groups of consumers on an ongoing basis, life insurance companies are increasingly prioritising where they can best improve their service to better meet their customers’ needs,” said Beddoes Institute director Rebecca Sheils.

“It’s encouraging that so many insurers are pursuing excellence in servicing claimants and policyholders.”

Zurich Top Choice For Consumers

Zurich has been named as the preferred choice of life insurance policy holders, winning the top award at the second annual Consumer Choice Awards.

Beddoes Institute Director, Dr Rebecca Sheils

The Awards, which are a joint initiative of the AFA and the Beddoes Institute, named Zurich as the 2017 Consumer’s Choice, a title won by BT Financial Group in last year’s inaugural awards.

Zurich was also named as the winner in the Most Satisfied Customer and Best Consumer Advocacy categories and was a finalist in the Value for Money, Best New Customer Service and Focus on Early Intervention Awards.

BT Financial Group, which had a very strong showing in last year’s awards (see: BTFG Sweeps Consumer Choice Awards) won three award categories – Best Application Process, Best Claims Staff and Return to Health and Wellness, and was a finalist in a fourth category – Best Turnaround Time.

“It’s one thing to be good in certain areas but it’s an entirely different thing to be consistently excellent in everything…”

Other insurers to receive an award were MLC Life for Best New Customer Service and Focus on Early Intervention, AMP for Value for Money and OnePath for Best Turnaround Time.

The Awards have three sections including the overall Consumer Choice Award – which recognises the insurer that excelled at servicing policyholders and delivering on promises to claimants – and the Policyholder Choice Awards and the Claimant Choice Awards.

The Policyholder Choice Awards recognised outstanding customer service and education, health and wellness programs, communication and other consumer-focused initiatives conducted by insurers, while the Claimant Choice Awards recognised outstanding service of IP, Trauma and TPD claimants, including claims processing, early intervention, support and holistic care.

Beddoes Institute Director, Dr Rebecca Sheils said insurers were listening to large groups of consumers on an ongoing basis and had begun to prioritise where they could improve their services to meet customer needs.

“This year marks an unprecedented level of inter-company engagement with the Awards.  It’s encouraging that so many insurers are pursuing excellence in servicing claimants and policyholders.  It’s one thing to be good in certain areas but it’s an entirely different thing to be consistently excellent in everything, and this is what we are starting to see,” Sheils said.

Consumers Choice Award

• Winner: Zurich
• Finalists OnePath, AMP, MLC Life

Policyholder Choice Awards

Value for Money

• Winner: AMP
• Finalists: Zurich, OnePath

Best New Customer Service

• Winner: MLC Life
• Finalists: AMP, Zurich

Most Satisfied Customer

• Winner: Zurich
• Finalists: AMP, OnePath

Claimant Choice Awards

Best Application Process

• Winner: BT Financial Group
• Finalist: OnePath

Best Turnaround Time

• Winner: OnePath
• Finalists: BT Financial Group, MLC Life

Best Claims Staff

• Winner: BT Financial Group
• Finalists: OnePath

Return to Health and Wellness

• Winner: BT Financial Group

Focus on Early Intervention

• Winner: MLC Life
• Finalists: Zurich, OnePath

Greatest Gain in Advocacy

• Winner: Zurich

November, 2017

What Matters Most When it Comes Time to Claim?

by Dr Rebecca Sheils, Director and co-founder of the Beddoes Institute

While life insurance claimants expect a financial benefit, many are seeking more from the claims process which can be complex and onerous during a stressful time of life.
As part of its ongoing research, the Beddoes Institute has found that education and awareness of what is taking place are key issues for many claimants.
Following on from recent articles in Riskinfo, Beddoes Institute Director, Dr Rebecca Sheils unpacks what is on the mind of claimants and how advisers and insurers can assist them.

In May of this year it was shown that more than half of advisers surveyed believed they had a joint role with insurers to assist their clients when it comes time to claim, however almost a third of advisers felt differently (see: Managing Client Expectations: A Job for Advisers or Insurers?)

At that time, the Beddoes Institute described the relationship between advisers, insurers and claimants as complex and “multi-dimensional”, warning that if the respective roles and responsibilities of advisers and insurers were not more clearly defined then client dissatisfaction and a loss of faith in advice and insurance may ensue.

Following the publication of that article, Riskinfo conducted a poll asking its readers whether the respective roles of advisers and insurers needed to be better defined at claim time and found that 72% of its readers thought they did (see: Claim Time – Advisers Seek Greater Clarity).Many claimants enter the application process with great uncertainty and worry about whether their claim will be paid based on what they have seen and heard in mainstream media over the last 18 months

In responding, one adviser described their role as a facilitator for their client in order to make the process as efficient and simple as possible and another stated that it was important for advisers to keep their “finger on the pulse” of the claims process as a duty of care to their client.

All those who commented seemed to agree that at a time when their clients were in need and third parties such as legal and consulting firms are stepping into the mix, advisers need to work collaboratively with insurers in actively managing their clients to achieve the best outcome possible.

In our latest research, the Beddoes Institute can reveal what claimants are expecting and what insurers and advisers can jointly deliver at time of claim. (These findings are from the Beddoes’ Policyholder Perceptions Study and the Claimant Journey Study – part of the rolling Life Insurance Industry Performance Barometer and the foundation for the joint AFA and Beddoes Institute Consumer Choice Awards. [http://www.consumerschoice.org.au].)

A Shared Philosophy

When a client initiates a claim, they have had a major health event that has turned their life upside down. Their focus has to be on their health and a cumbersome and onerous application process can detract from this.

Many claimants enter the application process with great uncertainty and worry about whether their claim will be paid based on what they have seen and heard in mainstream media over the last 18 months. This imposes additional anxiety and added financial stress during an already difficult time.

Claimants need ongoing proactive communication while their claim is being assessed and they need the decision to be made quickly so they are not left wondering and assuming the worst. They need to have their mind put at ease so they can focus on what is most important – their health. This is what insurance is all about.

This requires the adoption of a client-centred approach where the claimant is put at the heart of everything that is done.

The New Claims Process and the Role of Technology

For both Income Protection and Lump Sum claimants (trauma and TPD claimants), analysis of claimant feedback showed that the most important stages of the claimant’s journey were lodging the claim and the assessment process.  These stages were much more important than all other stages in the claimant’s journey.

Specifically, claimants need to have an easy application process during lodgement (appropriate information requirements, easy lodgement process etc.), staff who understand the needs and circumstances of each individual and are able to tailor their services and approach accordingly, and assistance available to claimants for the completion of the application forms if needed.  The latter is particularly important as many claimants are not capable of doing this on their own, especially in the case of mental health claims.

The specific needs of claimants during the assessment phase are principally associated with speed and efficiency, having suitably qualified assessors available who follow a transparent, diligent and fair process to determine claim eligibility, and finally a process that proactively keeps the claimant informed with progress updates.

The Role of Health Support in life insurance

Many customers – both policyholders and claimants – do not understand the role that an insurance company can play in facilitating their return to health and wellness nor do they understand the benefit of receiving holistic biopsychosocial (BPS) health support from their insurer during a claim.

Surprisingly, 28% of claimants thought they would benefit from physical health support, 23% from psychological and emotional support and 14% from vocational support. This is surprising given that two thirds of these claimants had a moderate to severe condition with a medium to long term duration.

Despite the apparent low level of “need”, only 5%-7% of IP claimants and no lump sum claimants are currently receiving these supports at an industry level.

Claimants often enter their claims journey not understanding their policy, level of cover, the claims process or the role that insurers and advisers can play to help facilitate their return to health and wellness

Education of Claimants

We believe that with education, more claimants would understand the benefit of receiving holistic BPS support and demand for this would be greater.  This in turn would lead to a faster recovery and earlier return to health and wellness.

Customers need to be educated at the start of their customer journey with their insurer and this education needs to continue at the time of claim. This means educating policyholders when they first take out their policy that their life insurer is able to assist beyond providing a financial payment.

Claimants often enter their claims journey not understanding their policy, level of cover, the claims process or the role that insurers and advisers can play to help facilitate their return to health and wellness.

Therefore, education is of paramount importance during the early stage of a claim, keeping in mind that the claimable event may well have impacted their cognitive functioning, especially for claimants with mental health conditions. As such, any information and education needs to be delivered multiple times across multiple channels and will often need to involve a broader support or carer network.  Keeping the customer informed of where things are at during the assessment process is critical.

Again, taking a claimant-centred approach, the fundamentals of good customer service, including proactive communication, are even more important to claimants as a customer group given the significant health issues they are facing and the associated stress.  This is a role for both the insurer and the adviser.

Leading Practices for Insurers

Based on many interviews with claimants and the findings of the Life Insurance Industry Performance Barometer Claimant Journey Study, leading practice guidelines for managing the claimants’ journey would include insurers doing the following:

1. Undertaking a detailed risk assessment when claim is first received to evaluate whether BPS health support is needed (after educating the claimant about the health support available).
2. Recruiting claims staff that are appropriately skilled to complete risk assessments.
3. Incorporate suicide risk assessment and reporting in ongoing claims staff education, especially for mental health claims.
4. During first contact, ask the claimant about their communication preferences during the claim and ask which other family members or friends should be included in the communication, obtaining permissions if communication is to go through a support person.
5. Develop a tailored, multi-disciplinary care plan tailored to the specific needs of each individual claimant.
6. Establish early intervention service and support protocols that involve a multidisciplinary team using a BPS health and wellness framework.
7. Create multidisciplinary health service teams comprising psychologists, OTs, physiotherapists, social workers etc. to undertake weekly case conference reviews of all claimants and provide supervision to all allied health workers.
8. Train claims assessors about the support services available in the community, through private health insurance and other health and carer services.
9. Develop systems and processes that allow for communication to be tailored to each individual and that includes regular and proactive contact (i.e. at least weekly) using each individual’s preferred channel/s of communication.
10. Establish the broader, holistic needs of lump sum claimants using a BPS framework of health and wellness to identify needs
11. Consider provisional acceptance of straight-forward claims to allow for early intervention wherever possible
12. Establish an ongoing claims management plan that is underpinned by a BPS model of health and wellness and that is outcome focused with clear goals agreed with the rehab team and claimant, along with accountabilities and timelines.
13. Develop mechanisms and metrics for tracking outcomes for each individual claimant.

Advisers should participate in the claims process as much as is practical, facilitating the lodgement of the claim and being available to assist during the assessment process.  They should be familiar and educate the claimant about the services available from the insurer and they should be available to advise their client when the outcome of the claim is known, including providing quality financial advice service to lump sum claimants.

About the Research

The Life Insurance Industry Performance Barometer delivers insights into the needs and expectations that advisers and customers (policyholders and claimants) want from life insurance companies and maps how companies perform in terms of meeting these needs.

The Life Insurance Performance Barometer Claimant Journey Study was designed collaboratively with industry, advisers and consumers using a customer journey framework. The specific dimensions measured within each stage were constructed from in-depth interviews with a large number of claimants in order to understand their needs and expectations during a claim.

October, 2017

It’s unanimous: technical skills essence of planning

by Simon Hoyle

The essence of financial planning – and what sets it apart from other professions – remains firmly and popularly rooted in the technical skills that all financial planners must master, the largest and most comprehensive assessment of the industry’s agreed-upon competencies has found.

The analysis, Financial Advice Competency Framework – An Industry Consensus, published by Beddoes Institute in conjunction with the Association of Financial Advisers (AFA), Asteron Life and Kaplan Professional, sets out seven knowledge domains that the industry itself agrees underpin financial planning competency.

They are: technical services, professionalism, client focus, self-development, connecting with people, business operations, and strategy and leadership.

Among these, the analysis has found that technical services – including the financial planning process, insurance, cashflow management, investment, and retirement and estate planning and taxation – garnered by far the strongest industry consensus as a required competency, followed by professionalism and a client focus.

Taxation, did not generate as strong a consensus as the other technical services that it is an essential competency for a financial planner. Issues such as developing strategic skills and leadership, while considered integral to overall competency, also were not as strongly agreed upon. Nor was demonstrating proficiency in running a business.

A director of Beddoes, Adam Tucker, says the findings should not be read as meaning that competencies such as strategy and leadership or competence at running a business are not important – they are; they just rank lower on the consensus scale.

“We’re not talking about importance, it’s not relative importance,” Tucker says. He adds that agreement on the required competencies of financial planners can’t be reached unless there’s a clear consensus on what financial planning is in the first place.

Defining financial planning

“A competency framework answers one of the ‘what is’ questions – what is financial advice?” he says.

Legislation and regulators dictate the financial planner’s minimum required skills and education, and it can be tempting to conclude that what the law requires is an acceptable definition of financial planning. In fact, financial planning is much more than just the technical skills and education that the law demands.

“This framework tries to redefine financial advice from the consumer’s perspective,” Tucker explains. He says the paper aims to reinforce and validate what’s already known about competencies, but also to “provide reassurance and some numbers around that”.

“That becomes particularly relevant to those areas that haven’t been well described in the past,” he says. “And the technical skills areas we can see are very traditional, very straight up the line. In fact, there’s a direct correlation with a lot of the framework from FPEC [the Financial Planning Education Council] and ASIC [Australian Securities and Investments Commission] documents there as well.”

Tussle over taxation

Tucker says the most contested aspect of technical skills was whether taxation was a competency; advisers were “quite keen to pull back on that” as agreed upon and necessary.

“People feel more comfortable with things that stay the same than [with those that] change a lot, and taxation is something that changes a great deal, and would require a great deal of time to be across,” he adds. “The financial advice process is fairly static. It changes little over time and we become very comfortable with that. Risk, risk assessment, platforms for providing product, etc, make that a fairly stable environment. Retirement moves a little but mainly around different rules and so forth.

“[In contrast, taxation] is not seen as core, like those other technical services, and it’s also seen as being something that moves very quickly. And we have access to very skilled colleagues, in terms of the accountants, to whom we can make an appropriate referral.”

Different skills at different stages

While strong technical skills might seem like a no-brainer in terms of a competency a financial planner needs, Tucker underlines the fact that they should not be taken for granted.

Different skills are acquired at different points in an individual’s development. Technical skills are essentially the ticket to the game, and they’re in many ways the easiest to acquire, so it’s no coincidence that those are the skills new entrants to the industry are first trained in and required to possess.

“The financial advice competency framework is an over-arching framework that includes and supports existing technical frameworks, such as ASIC’s and FPEC’s, and it extends them,” Tucker says.

Higher-order skills – including effective communication, resilience, judgement and developing trust – tend to emerge later in professional and career development, and often at older ages.

“I think of competency as knowledge then skills, then attitudes, then behaviours, not necessarily sequentially, but those four elements,” Tucker says. “It’s pretty easy to teach knowledge – you just provide them with a book and do questions and answers. Skill is, pretty much, you create a workshop and do some practical things. Attitudes and behaviours are where you need coaching and supervision and mentoring.”

Knowledge domain: Technical services

Here is how the six aspects of technical services were described for the study, and how each one fared in the survey.

1. Financial planning process

Critically apply the financial planning process and create solutions tailored to clients’ needs and circumstances, including determining the client’s needs and goals, preparing, presenting and implementing a Statement of Advice, as well as monitoring and reviewing the plan over time.

This statement developed from the theme that advisers should be able to create customised advice for each client and track the outcome of this advice over time. The expert panel approved this statement with 91.5 per cent strongly agreeing and 8.5 per cent agreeing (100 per cent approved: Consensus Rating 0.50 – see note for description of Consensus Rating).

2. Insurance

Analysing clients’ needs in relation to insurance, apply the principles of risk management, understand the types of insurance and know how to evaluate insurance products. This also includes the requirements for clear documentation and disclosure in relation to insurance, the implications of taxation on premiums and benefits as well as an understanding of personal insurance (life, income protection, and health), general and compulsory insurance products and the management of claims.

The expert panel approved this statement with 82.2 per cent strongly agreeing and 16.9 per cent agreeing (99.2 per cent approved: CR 0.41).

3. Cash flow management

Managing cash flow including budgeting, securing and managing credit and understanding the impact on social security and government benefits, e.g. superannuation

This theme developed from discussion of the need to create and monitor budgets and cash flow in support of a client’s goals. The expert panel approved this statement with 79.2 per cent strongly agreeing and 19.2 per cent agreeing (98.3 per cent approved: CR 0.37).

4. Investment

Critically evaluating investment decisions including measuring risk tolerance, understanding the psychology relating to investing and the cost of investment. This also includes understanding the principles of portfolio construction and asset allocation, gearing, diversification, managed investment, securities, derivatives, shares, real estate, cash, foreign exchange, and international investments.

Interviewees were most interested in this competency. Consumers, in particular, believed advisers must be able to create investment strategies that are customised to the client’s needs, rather than templated and standardised. The expert panel approved this statement with 65.3 per cent strongly agreeing and 32.2 per cent agreeing (97.5 per cent approved: CR 0.22).

5. Retirement and estate planning

Evaluating retirement and estate planning practices including superannuation structures, taxation and investment strategy, wills, trusts and powers of attorney, administration of an estate, business succession, asset protection, SMSF, taxation implications, superannuation and death benefits.

The interviews described the importance of being able to provide comprehensive retirement and estate planning advice. The expert panel approved this statement with 71.2 per cent strongly agreeing and 21.2 per cent agreeing (92.4 per cent approved: CR 0.21).

6. Taxation

Applying the requirements of taxation to individuals, companies, partnerships, trusts and superannuation as far as these relate to financial advice including deductions, rebates and credits, fringe benefits tax, GST, salary sacrifice, assessable income, and superannuation.

Some interviewees considered that advisers should be able to evaluate the impact of advice on taxation. The expert panel approved this statement with 55.1 per cent strongly agreeing and 35.6 per cent agreeing (90.7 per cent approved: CR 0.05).

Note: The Consensus Rating (CR) is a standardised scale of expert panel approval between -0.5 and +0.5 enabling easier comparison of the approval between competency statements.

Source: Financial Advice Competency Framework – An Industry Consensus, Beddoes Institute, AFA, Asteron, Kaplan Professional

September, 2017

What Matters Most When it Comes Time to Claim?

 by Dr. Rebecca Sheils, Director of Beddoes Institute

July, 2017

AFA to Re-Examine Education Pathways

Dr Adam Tucker, Director of the Beddoes Institute

The AFA is asking for adviser feedback as it aims to redefine education pathways as part of a project canvassing industry views and practices on what is applicable and beneficial for advisers and clients.

The Association stated the research would create industry-led evidence of what education pathways for advisers should look like.

This would include technical and communication skills, interpersonal qualities and personal attributes outlined in previously published white papers published from the AFA and the Beddoes Institute.

The AFA will conduct the research in conjunction with The Beddoes Institute which has already begun structured interviews with senior management of advice licensees, advisers, consumers and industry groups, according to Beddoes Institute’s Dr Adam Tucker.

The research will use a process of structured dialogue among a panel of experts to reach an agreed framework with the second phase of the research to include a series of online voting on the draft framework elements by an online expert panel with each participant responding to a number of survey covering key elements.

Tucker said advisers, regulators, academics and professional associations would also be canvassed to ensure the draft framework met the needs of the advice sector with the aim of creating an educational framework built by those who had to work within it.

Campus AFA General Manager, Nick Hakes said “This is an important inflection point for our profession. It needs the voice of advisers to help shape the profession we want to become.”
“There has never been a better opportunity for adviser knowledge and expertise…and the time to start an adviser education revolution is now,” Hakes said.

“Our research with The Beddoes Institute will ultimately produce a pragmatic new approach that recognises all other frameworks in our market,” Hakes also said adding the new Financial Advice Standards & Ethics Authority was an opportunity to re-imagine an education pathway that reflects what consumers value from their financial advisers.

The research is being supported by Asteron Life and Kaplan Professional and will result in a white paper and implementation kit for licensees due out in October 2017.

The AFA is also calling on advisers to participate in the panel and a participation form can be

July, 2017

AFA to propose adviser education standards

by Larissa Waterson

The AFA has announced it will launch a research project that will inform FASEA on what the adviser education pathway should look like.

In a statement today, the AFA announced it is launching a research project in response to the government’s new professional standards regime and is calling on the advice community to participate.

The research will provide ‘evidence’ of what the new adviser education pathway should look like, the AFA said. At the conclusion of the research, licensees will have access to a white paper and an ‘implementation kit’ for the new education framework. These are expected to be available in October 2017.

The framework will cover elements contained in existing syllabuses and include new elements e.g. qualities such as interpersonal skills, attitudes and behaviours in addition to technical abilities and knowledge, the AFA said in a statement on its website.

“The results will be published as a white paper and be made widely available to inform bodies, such as FASEA and organisations responsible for producing education, CPD, examinations and supervision of financial advisers during their first professional year,” the statement said.

The first stage of the research project was to conduct interviews with CEOs, senior executives of licensees, consumers, advisers and other industry groups, the AFA said. This stage is almost complete.

The next stage will involve a series of online voting on draft framework elements via an online panel where each panel participant will be asked to respond to up to five surveys over three months, voting on key elements, the statement said.

The AFA is now calling on advisers to participate in the panel.

Advisers, regulators, academics and professional associations will be canvassed to ensure that the draft framework aligns with the needs and expectations of the industry, the AFA said.

In June, the FPA released its proposal on how advisers should transition to the new education requirements.

July, 2017

AFA collaborating for education framework rethink

by Jamie Williamson

The Association of Financial Advisers is calling on the broader financial services sector to help shape a new framework for adviser education, acknowledging all other existing frameworks in the market.

The industry body will work with the Beddoes Institute, Asteron Life and Kaplan Professional to develop the new standard, with dealer group chief executives and senior executives, consumers, advisers and other industry groups having already participated in structured interviews.

The association is now asking industry participants on all levels to register to join of a number of online panels, completing a series of surveys over three months to better understand and ultimately redefine what makes a great financial adviser.

The AFA said the Financial Advice Standards and Ethics Authority (FASEA) demonstrates an opportunity to reimagine an education pathway, reflective of what consumers’ value about financial advice and complementary to the Professional Standards legislation.

“This is an important inflection point for our profession. It needs the voice of advisers to help shape the profession we want to become,” AFA general manager, member services, partnerships and campus Nick Hakes said.

The resulting framework will comprise technical and communication skills, interpersonal qualities and personal attributes, and will form the basis of a white paper and an implementation kit to be provided to licensees.

Finally, advisers, regulators, academics and professional associations will also be canvassed to guarantee that the draft framework aligns with the needs and expectations of the industry, ensuring its success as a framework designed by those impacted by it.

Acting head of Asteron Life Daniel Waller said the insurer is delighted to be partnering on the project.

“It is critical to embrace professional education as it continues to evolve and becomes an integral part of the future of the industry…It will offer substantial help and support for advisers and become increasingly important as we transition through the next era of financial advice,” he said.

The industry white paper, framework and implementation kits are expected to be released in October 2017.

July, 2017

AFA and Beddoes undertake education research

by Malavika Santhebennur

The Association of Financial Advisers (AFA) is undertaking collaborative research to provide what it says will be industry-led evidence of what the education pathway should look like.

In partnership with Asteron Life and Kaplan Professional, the AFA has engaged the Beddoes Institute to undertake research, with the framework including technical and communication skills, interpersonal qualities, and personal attributes as described in white papers previously published by the AFA and the Beddoes Institute.

Beddoes has used the Delphi process to conduct the research, which is a consensus development methodology that includes structured dialogue among a panel of experts to agree upon a framework from the various opinions of participants.

June, 2017

Managing Client Expectations: A Job for Advisers or Insurers?

By Dr Rebecca Sheils, Director and Co-Founder of the Beddoes Institue

Consumers are at the heart of the life insurance industry and, in an industry first, the Beddoes Institute has looked at the expectations of advisers, policyholders and claimants with regard to the roles that advisers and insurers are expected to play when clients set up a policy, in the ongoing customer relationship management while the policy is in-force and when they make a claim. In this article, Beddoes Institute Director, Dr Rebecca Sheils writes that each of these steps are important stages in the customer journey and bring expectations of the respective roles the adviser and insurer will play – which may run counter to what actually happens. While this may sound like a simple case of misunderstanding, it could lead to disappointment and a loss of faith in advice and insurance.

Introduction

In this study of consumer expectations, Beddoes Institute sought to unravel the expected roles and responsibilities of advisers and insurers by policyholders and claimants.

The study acknowledges that policyholder engagement is made difficult because of the differing relationships between policyholders/claimants, life companies and advisers, where the roles and responsibilities of each party are not agreed or well defined.

Understanding each party’s expectations, and advisers and insurers reaching agreement on their respective roles, is critical to re-establishing engagement with policyholders and providing a positive experience at the time of claim.

Using data recently collected in Beddoes’ Life Insurance Industry Performance Barometer, the expectations that advisers have of their role and the insurer’s role in managing the end-client when setting up a policy, while the policy is in-force and during a claim were catalogued. The expectations retail policyholders have of their adviser and insurer at each of these critical stages was also collected, as were the expectations that retail claimants have of their adviser and insurer when making a claim.

Roles When Setting up an Insurance Policy

When setting up a policy, most advisers (89%) and policyholders (57%) believe that advisers alone should provide policy advice and recommendations although some 8% of advisers and 30% of policyholders believe that this role should be shared between advisers and insurers.

Policyholders expect that, in addition to advisers providing policy advice and recommendations, advisers should also be primarily responsible for keeping them informed about the status of their application (33%), coordinating third parties (e.g. medical assessments) (46%) and managing the policy application (60%).

While 89% of advisers agree with the majority of policyholders (57%) that they should be solely responsible for providing policy advice and recommendations, many advisers believe that they and insurers should be jointly be responsible for keeping policyholders informed (46%), coordinating third parties (39%) and managing insurance policy applications (55%). A third of advisers (33%) believe that coordinating third parties in relation to a policy application is the role of the insurer alone.

Many advisers believe that the roles that policyholders expect of them should be the joint responsibility of advisers and insurers, e.g. keeping the client informed, coordinating third parties and managing the policy application whereas many policyholders expect that advisers should be providing these services.

Roles While the Policy is In-Force

In terms of the ongoing customer relationship management, most advisers (81%) believe that they alone should provide ongoing policy advice and recommendations to their clients whereas fewer policyholders (43%) see this as the main role of their adviser. Notably, 55% of policyholders see their insurer as playing a role in this (24% see their insurer as being mainly responsible for this and 31% see both their insurer and adviser as being jointly responsible for this. This compares to 19% of advisers who see the insurer as playing a role.

Likewise, 32% of advisers see it as mainly their role to provide ongoing policy education and only 20% see this as the role of the insurer. This compares to 22% of policyholders who view this as mainly being their adviser’s responsibility, with a larger proportion of policyholders (35%) viewing this as mainly the role of their insurer.

Also of note, both advisers and policyholders have a similar view of the adviser’s role in keeping the end-client informed about their policy (i.e. when premiums are due, changes to the premiums, when payments are made, if/when payments are dishonoured or the policy lapses etc.). 25% of advisers see this as solely their role and 21% of policyholders see their adviser as being mainly responsible for this. Importantly, 65% of advisers and 48% of policyholders believe that this role is a shared role between advisers and insurers.

Policyholders increasingly look to their insurer to play a bigger role in managing them as a customer on an ongoing basis. Encouragingly, advisers also appear open to working collaboratively with the insurers in most areas, however, there is a disconnect between advisers’ and policyholders’ views of who should be providing ongoing policy advice and recommendation

Table: Expected Roles of Advisers Alone

*Significantly different from the other groups (P<0.05)

Roles When Making a Claim

Policyholders who have not yet made a claim, recent claimants and advisers were asked what roles and responsibilities advisers and insurers should fulfil during a claim.

Most advisers believe that there is a joint insurer-adviser responsibility to educate the client about their policy (53%), to explain the claim process (57%), to manage the application (55%), to provide support with ongoing forms (57%), to work with the relevant third parties during the assessment and management of the claim (58%), and to keep the claimant informed of where things are at throughout the claim (63%).

Claimants on the other hand have mixed expectations of insurers and advisers, with the largest proportions of claimants expecting that their adviser alone will educate them about their policy (42%), explain the claims process (36%), manage the claim application (37%), and provide support with ongoing claims forms (35%).

Having said this, a large proportion of claimants (36%) expect insurers to coordinate third parties and most claimants (70%) expect either the insurer or the insurer and the adviser will jointly keep them informed of the claim application progress.

Beyond the claim application process, most advisers, policyholders and claimants agree that insurers are solely responsible for accurate and timely payments and coordinating a support and recovery plan to help the claimant return to health and wellness.

Table: Expected Roles of Advisers Jointly with Insurers

*Significantly different from the other groups (P<0.05)

Interpretation

Insurance companies clearly have a role with the end-client when a policy is being set up. Advisers expect that insurers will share in the role of keeping their clients informed about the status of the policy application, coordinating third parties involved in the application (e.g. medical assessments) and managing the policy application whereas the expectation of policyholders is more varied.

Policyholders increasingly look to their insurer to play a greater role in managing them as a customer on an ongoing basis. Encouragingly, advisers also appear open to working collaboratively with the insurers in managing the customer on an ongoing basis in all areas, except for providing ongoing policy advice and recommendations which they see as their main role. This contrasts with the view of policyholders who think this is the responsibility of the insurer or a joint responsibility.

Overall, advisers have more consolidated views of the role of insurers in the claims process than policyholders and claimants.  The majority of advisers expect that insurers will jointly manage the process with them and less than a third of advisers believe that they are solely responsible for any single step of the claims process.  Conversely, claimants and policyholders have mixed expectations of their advisers and insurers with large proportions (34 – 42%) believing that it is the advisers sole responsibility to manage certain steps of the claims process, especially policy education and explaining the claims process to them.

Conclusion

There is a need for advisers and insurers to clarify their respective roles in relation to keeping the policyholder informed, coordinating third parties and managing the policy application.

Not all insurers and advisers will agree on where the line should be drawn but if these roles and responsibilities are not clarified for large groups of policyholders and claimants, room for misunderstanding and disappointment will continue to exist.

Once roles are agreed, the expectations of policyholders and claimants can be aligned with these through education and communication in order to optimise their satisfaction and streamline the claims process for all involved.

May 16, 2017

Adviser Roles Not Clearly Understood by Policy Holders

March 14, 2017

Policyholders and Claimants Give High Rating to
Insurance Advice

Around 75% of life insurance policy holders are satisfied with their adviser and their life insurer, according to new research, contradicting a recent consumer survey which ranked advisers lowest for satisfaction when purchasing insurance
overall rating of 78.2% and life insurers were rated at 73.6%.

The Beddoes Institute research did find, however, that policyholder satisfaction dropped off after two years with insurers given overall satisfaction rating of 60.6% and advisers given an overall satisfaction score of 56.8%.

Beddoes Institute Director, Dr Rebecca Sheils said the decline in satisfaction levels was the result of consumers equating lower levels of contact with less value as they have come to expect more frequent interaction from service providers in other walks of life.

 

March 10, 2017

Zurich, BTFG Repeat Client Service Team Success

March  2017