Latest Poll – Fees for Claims Support?

Ongoing developments across the Ditch have prompted our latest poll about whether your future advice business proposition may consider charging fees for claims support services.

In what is, admittedly, a very different regulatory environment in Australia, where upfront and ongoing commissions are capped at 60% and 20% respectively, necessity has become the mother of invention when it comes to structuring a commercially sustainable risk advice business.

As overall adviser numbers, specialist risk adviser numbers and retail life insurance new business sales continue their sad decline in Australia, the entire financial advice sector has been galvanised into new ways of thinking about how they can sustain a commercial business proposition while adhering to the burden of regulatory requirements under which they must currently operate.

From a life insurance industry perspective – and giving credence to the validity of this conversation – new services are emerging which offer advice practices the option to outsource to an expert and independent third party (not legal firms!) the opportunity to manage life insurance claims on their behalf (see: Launch of New Claims Advocacy Service).

The rationale is that the (client pays) service, traditionally funded via renewal commission revenue streams, allows the adviser and their business to engage in more commercially productive client relationship and new business development service opportunities than would otherwise have been the case.

Until quite recent times, few – if any – Kiwi advisers or advice businesses have contemplated charging fees for the claims support services they provide. This may well remain the case for you and for the practice in which you operate. But are times changing? Is it outside the realms of possibility that you may one day charge fees for what has – until now – been a ‘given’ in the industry, in order to maintain the commercial viability of your business?

Tell us what you think and we’ll report back next week…

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