Speaking to InvestorDaily, Mr Hay said the Future of Financial Advice (FOFA) reforms were engendering a new focus for the life insurance industry.
“One of the good things about FOFA is that life insurers have had to work more closely with financial advisers and work out how we can better support them and make the products more user friendly and help them to increase productivity and efficiency,” Mr Hay said.
“Life insurers need to fit into the more holistic mindset of the adviser these days, their role is more to support the adviser in providing whole-of-life advice to clients,” he added.
Both industries need to collaborate in order to take advantage of the Australian under-insurance problem, he said – ie the large pool of Australian consumers who are not considered to have any or adequate insurance.
However, notwithstanding the collaborative relationship, advisers need to increase their confidence on risk issues in order to take advantage of that opportunity, Mr Hay said.
“It’s all about having the confidence to have the conversation,” he said. “[Advisers] need to link [insurance] to the client’s other financial needs and say ‘Once we have the investment strategy in place, we then need to protect that strategy’.”
While accepting the premise that insurance products are complicated and that risk terminology can be unclear, Mr Hay said it is no more complex than other financial areas such as investment strategy and that the financial advice industry has developed a negative perception of life insurance.
“It’s all about moving to that more holistic mindset,” he said.
