Advisers needed to be more "rebellious" and push providers to offer a greater range of insurance options on platforms, Powerwrap chief executive Cormac Heffernan said yesterday.
"Platforms now have greater choice in terms of managed funds, shares and term deposits et cetera, but it must extend into the insurance area as well," Heffernan told InvestorDaily.
"Generally, platforms only have one insurance provider, [whereby both fall under the same owner if bank-aligned], or there's a strong preference for one provider, made through a deal with the insurance company."
The arrangements made between platforms and insurance providers had continued, as people were still unaware insurance products were being used to subsidise the platform and therefore lowering costs, he said.
"These are false economies," he said.
"Advisers have said to me that [the absence of wider insurance options] is a real problem for them, yet the industry should be working for advisers, rather than advisers working under outdated industry practices.
"You shouldn't have to restrict your choice in order to get a good deal for your clients."
To combat the insurance choice issue, the industry needed to encourage financial advisers to demand more from their platforms, he said.
"They're being forced to accept less, but if advisers push hard and demand choice, the suppliers will [listen]," he said.
"Some of the rhetoric is that this is just the way the industry is, so they take it as it is. Advisers need to be much more rebellious than that and put pressure on people like me to get what you need."
As an independent platform provider, Powerwrap had set a benchmark of offering 10 insurance providers and was committed to adding more, he said.
