We look at consumer attitudes and approaches to personal finance and their relationship with their adviser.
Key Findings
The top 15 take aways from Understanding the Adviser-Client Relationship Report 2019.
Key Findings
The top 15 take aways from Understanding the Adviser-Client Relationship Report 2019.
| 01 | Confidence levels amongst consumers and SMEs in being able to explain various life insurance features have increased across the board in 2019. |
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| 02 | Consumers and SMEs are seeing an adviser about life insurance to protect their family, or following a recommendation from a family member or friend. |
| 03 | The most important factors when choosing an adviser continue to be: • Honesty and trustworthiness • Transparency about fees and commissions • Adviser experience |
| 04 | 75% of consumers and 62% of SMEs first worked out what life insurance cover they needed, rather than looking at how much they could afford. |
| 05 | Buying life insurance through an adviser is perceived to provide a higher quality product that is better tailored to individual needs compared with insurance purchased either directly online from an insurer or through a superannuation fund. However, this is also perceived to be more expensive. |
| 06 | 7 in 10 prefer to pay an upfront fee with lower premiums over the lifetime of the policy. |
| 07 | Consumers and SMEs were willing to pay an average of $1,700 for insurance advice. |
| 08 | To offset not paying an upfront fee to advisers, 3 in 10 were willing to pay between 1–5% extra in premiums over the lifetime of their policy. |
| 09 | While the majority are aware insurers pay commissions to advisers, many don't know how much they receive, particularly consumers. |
| 10 | Almost a third of consumers and half of SME’s are considering either changing their current adviser, or ceasing to use one completely, citing their top reasons as: • High fees • Lack of affordability • No ongoing need for insurance • Lack of contact |
| 11 | If looking for a new financial adviser, more than 50% of consumers and SME’s with life insurance would prefer to use an independent adviser. |
| 12 | Over 40% of consumers and 60% of SMEs with life insurance have concerns their life insurer would pay out in the event of a claim. |
| 13 | 6 in 10 undertook a review with their adviser in the last 12 months. Those who had a review are 2.1 times more likely to recommend their adviser. |
| 14 | Most indicated that the removal of commissions would not change their willingness to see an adviser. However, they believe this would lead to more Australians being underinsured. |
| 15 | If under financial pressure, consumers are more likely to cut back on the following before they let go of their insurance cover: • Holidays • Pay TV • Gym/personal training expenses |
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