The advice industry post-Life Insurance Framework reforms is "bright and full of potiential" for those businesses that adopt a more specialised approach, according to Bombora Advice managing director Wayne Handley.
Handley said the LIF reforms are compelling advisers to "reflect and ensure we are well placed to leverage what the new era will offer." This means developing a specialised risk advice framework that is supported by "alliances with fellow professional service firms."
As an example, Handley cited how Bombora adopted a "quality over quantity" model for its risk advice services, which involved Bombora practice MBS Insurance forming joint venture partnerships with Pitcher Partners, Honan Insurance Group and HLB Mann Judd.
He said this model isn't limited to national professional networks and can (and has) been employed by smaller practices engaging with accounting, legal and broking businesses.
"Working collaboratively with complementary service providers can only enhance client outcomes. At the same time, the benefits of scale and operational efficiency can be considerable," Handley said.
"As a new era dawns, more than ever it is important to develop meaningful and sustainable relationships with fellow professional service providers. Client best interest will consistently and constantly be met with many of the traditional costs required for new client acquisition and retention to be some of the early savings delivered."
He did offer some words of caution, noting that the industry is currently facing a dearth of new entrants to support the "new era."
To remedy this, Handley strongly encouraged the development of professional development pathways similar to those used in the legal, accounting and engineering sectors. Bombora's pathway has often involved transitioning through administrative roles, then para-planning and finally financial advice.
Late last year, Financial Standard found in its weekly spot poll that many advisers were still unclear about their obligations under the LIF rules with less than six weeks before the deadline in January. More than 40% of advisers who took part in the survey were unsure about their level of preparedness.
About 17% of advisers felt strongly prepared while 11% were fairly confident their affairs are in order. Interestingly, about 28% of advisers either felt greatly unprepared or simply weren't ready for life insurance remuneration changes that will impact their business.