Insurers need to improve processes for wealth advisers – study
Insurers need to improve processes for wealth advisers and firms who are not protection focused to provide more consistency and keep advisers more actively informed, according to a new study from the Finance Technology Research Centre (FTRC).
The study, titled Understanding adviser preferences when dealing with insurers, found that a particular priority for insurers should be integrating with the practice management and cash flow planning tools that are core to so many wealth advisers’ operational processes.
The detailed independent analysis was conducted via one-to-one interviews with key stakeholders from firms falling into six different categories - protection specialists, mortgage specialists, holistic financial advisers, wealth managers, networks and niche advisory firms.
The study found that while the processes deployed when advising and interacting with clients differed between each segment, the way in which they interact with insurers, and as such their concerns, were largely consistent.
The research highlights that life insurers need to do more to support the ways that advisers who are not protection specialists, e.g. wealth advisers, financial planners and mortgage advisers, operate and engage with their clients.
The key areas of friction between insurers and advisers fell into three categories: managing in-force policies, a lack of consistency across insurers and the need to be kept informed by insurers at all times.
It highlighted that many insurers often do not provide enough in-force policy information or functionality to make changes within their extranets or the core operating systems advisers use i.e. their practice management system. Consequently, advisers will resort to calling the insurer directly whenever they require information or need to make a change, which is inefficient for both parties.
A lack of consistency and consensus from insurers also left many advisers confused, particularly with regard to where signatures are concerned. Whereas some insurers do not require a signature on trust forms for example, others accept an electronic signature or insist on a wet signature. This leaves many advisers confused as to what is legally acceptable and as such nervous when putting trusts in place.
Universally, advisers expressed concerns that they are not adequately kept up to date by insurers, especially regarding claims processing.
Ian McKenna, Director of FTRC, said: “This study confirms that whilst the industry has moved forwards in many areas, there is still much that can be improved to help advisers provide as good an experience for consumers as possible. Many of the issues highlighted in this report have been a concern for advisers for many years and the conclusions should act as a call to action for insurers. Of particular note is that all advisers want insurers to be more proactive in keeping them informed across all processes. It is currently felt that the information they are provided with via tracking services and extranets is not sufficient, if available at all, and often advisers can be left embarrassed as they are not aware of key information when speaking to their clients.
“A particular priority for insurers should be integrating with the practice management and cash flow planning tools that are core to so many wealth advisers’ operational processes. If insurers don’t start communicating with the systems that advisers use at the heart of their businesses this will considerably constrain the ability to address the protection gap.”
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