How to pull advisers back into risk advice

PPS Mutual says insurers and industry bodies need to communicate how valuable advisers are to the risk advice space.

Ahead of the Adviser Innovation Summit 2024, the platinum partner’s chief executive, Michael Pillemer, said that with underinsurance being a significant issue in Australia, advisers could fill the gap.

“But risk advice isn’t seen as sexy, particularly by the younger graduates,” Pillemer told ifa.

“I think we’ve got an image issue in the industry. The insurance industry and industry bodies need to invest in communicating the unbelievable work that financial advisers and risk insurance specialists do for clients.

“Advisers who have been in the industry for a long time know what it’s like to deliver a cheque from a claim and the positive impact it could have on clients. We need to get that across to the younger generation to attract them into the industry.”

Noting that the younger cohort are conscious about different issues and seek to add value to their services, Pillemer said it is vital to convey how impactful delivering risk advice is to clients.

He added that while obtaining a life insurance policy such as income protection or disability and trauma cover could be one of the most important financial decisions a client makes, people avoid contemplating death or becoming injured or disabled.

“They push it into their subconscious,” Pillemer said.

“It requires a specialised set of soft skills to bring those issues to the consciousness and have those conversations with clients. We need to communicate how complex yet interesting this role could be for the younger generation. They may not realise how complex risk advice is.”

Furthermore, Pillemer remarked, advisers who manage their businesses efficiently could enjoy a work-life balance and flexibility.

“Young graduates may be fighting to secure roles in investment banking and finance, but having the work-life balance is important to them,” he said.

“We need to make it known that advice roles offer more flexibility and the chance to build a strong client base.”

A recent PPS Mutual report, Reducing the Trauma, revealed that despite the importance of private health cover for many, it can result in high out-of-pocket costs.

Pillemer said financial advisers could add value by assisting clients with their trauma cover claims and implement effective structures that enable them to support their family when they are experiencing a health crisis.

PPS Mutual operates under a mutual insurance model, which allows customers to share the profits generated in the business. According to Pillemer, this alleviates a key hurdle in an insurance offering.

“Life insurance is often perceived to be a grudge purchase because the client doesn’t get anything tangible back at the end of the day if they don’t claim on the policy,” Pillemer said.

“Under our mutual model where the client is an owner, not only is there an alignment of interests, but they also get something back at the end of the day.”

Speaking about the platinum partnership between PPS Mutual and the Adviser Innovation Summit 2024, Pillemer said he wants to educate advisers about the mutual model at the event and how it could benefit their clients.

“We want them to understand how they could improve client retention and obtain more referrals under a mutual model,” he concluded.

To hear more from Michael Pillemer about how insurers are boosting efficiencies to entice advisers back into the risk industry, come along to the Adviser Innovation Summit 2024.

It will be held on Tuesday, 4 June at Telstra Customer Insights Centre Sydney, and Thursday, 6 June at Zinc at Fed Square, Melbourne.