Australia's financial planning sector is at risk of being overshadowed by industry rivals in the area of insurance advice if it does not review its business models to include the limited advice market.
MLC Advice Solutions protection advice national manager Fiona Navarro said it would be "no stretch" in years to come for simple advice players, such as industry superannuation funds and direct insurers, to take a share of the intermediate advice market away from risk advisers.
"I don't think as an industry, quite frankly, we've been very good at dealing with that [limited advice] segment," Navarro told the MLC Advice Solutions Risk Specialist Network Retreat in Kingscliff, New South Wales.
"Mostly it's been an issue around profitability for businesses to actively service and manage those clients, and I think that's where we are going to see a rise in terms of industry funds and other potential players who will come in and provide that sort of simple advice, who have the scale to do it.
"I think this just means a re-look at the way we all do things, to say the model that I'm operating now, which segments does it pick up, are there opportunities I'm missing or am I exactly in the right place in terms of the clients that I'm dealing with."
She said while the inclusion of new entrants, such as Virgin Money and other direct insurers, was a threat to the risk advice industry, there were still opportunities.
According to MLC research, a survey of 2.287 million people between the ages 25 to 45 found only 10 per cent were advised by a financial planner, leaving 90 per cent unadvised.
Of the people who are currently not advised, 42 per cent are open to gaining advice.
"We know that the opportunity for insurance advice is there and the clients need it and the question then is what sort of advice do they need?" Navarro said.
