The proportion of financial advisers specialising in life insurance has more than halved in the last five years, according to Investment Trends research.
In its 2019 Planner Risk Report released today, Investment Trends revealed just 15% of advisers are considered risk specialists - those deriving more than 50% of their total practice revenue from providing risk advice. Five years ago, the number stood at 34%.
Investment Trends senior analyst King Loong Choi said more advisers were diversifying their offerings and focusing on a more "holistic" experience for clients.
The risk specialist planner has become an industry niche, Choi said.
"The admin burden of compliance and paperwork, coupled with an uncertain regulatory landscape, are the top challenges that prevent financial planners from growing their insurance advice," he said.
"As a comparison, fewer planners consider client-related challenges to be significant, with only 16% saying it is challenging to demonstrate the value of insurance to their clients and 12% citing client engagement/retention as an issue."
However Choi said more advisers are facing challenges posed by "inefficient processes" relating to underwriting, the application process and limited integration between systems.
"This highlights the opportunity for insurers to further support financial planners and their clients by improving their onboarding process," he said.
The report also shed light on which insurers advisers were turning to after a spate of mergers and takeovers in the Australian life insurance market, with new less established insurers such as Integrity Life attracting attention.
"Industry wide, 28% of planners say they intend to start using a new insurer in the next 12 months, with the new, less established insurer brands such as NEOS, Integrity and MetLife leading in planner perceptions," Choi said.
Investment Trends said the market was still competitive despite the takeovers, noting financial planners use 3.9 insurers each on average, out of 8.9 insurers available on their APL.