Financial Planning
Fee models an art, not a science

Less than three months remain until the Life Insurance Framework becomes commonplace for advisers and experts say there's still time to review or reconsider advice pricing options.

The AFA 2017 National Adviser Conference will hear from four industry experts about integrating fees into risk advice practices on Friday.

Speaking at the session is AMP national development manager - wealth protection, Melinda Fox. She says as the Life Insurance Framework (LIF) looms, many advisers are currently reviewing business models, pricing techniques and client value propositions "to remain sustainable and drive business growth into the future."

She says it is significant for advisers to re-explore the value they provide to clients and "why this crucial piece of the advice jigsaw is an art and not a science."

"Today's insurance adviser must be anything from coach, counsellor and educator through to technical specialist, key negotiator and advice practitioner," Fox says.

"The competitive landscape means consumers can fill some needs through direct or industry fund insurance channels. So, as advisers evolve their pricing and business models, being clear on the value and key difference they make to their client's lives is crucial."

Throughout the session advisers are set to gain insight into the theory and practical application of integrating fees into a risk advice business. Fox will cover off more on the theory, as will Elixir Consulting business coach Sue Viskovic.

Rando Associates director and senior adviser Mark Rando will speak alongside Mr Insurance director PJ Byrne and the pair will take a more practical approach to the discussion.

Rando said the pair will cover off questions about how to segment client bases - looking at whether clients are potential referral sources; do clients appreciate the advice received; what is the potential for growth etc. He says this can determine a client's value to the practice and the service they receive.

There will also be detailed discussion of service packages and what's included in those packages. Rando added he will discuss some pricing examples around how certain components are priced, including: Initial meeting; fact find meeting; statement of advice (SoA); implementation - as disclosed in your SoA; service agreements - as disclosed in your SoA; and the claims management service.

Last month Zurich research showed the majority of risk advisers are still not prepared for impending changes to remuneration to be brought by the Life Insurance Framework taking effect in January 2018.

Read more: Life Insurance FrameworkAFAElixir ConsultingMark RandoMelinda FoxMr InsuranceNational Adviser ConferencePJ ByrneRando AssociatesSue ViskovicZurich
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