The web, regulation and our increasingly self-directed consumer market have forced the advice industry to evolve or die. As a result, the quintessential “risky” or risk adviser is being replaced by a new, savvier species – the Risk Professional. And they know that a risk discussion that goes deeper than just insurance is key to their survival.
- Risk
It’s one thing to sell an insurance policy to a client. It’s a different thing for that client to fully understand their potential financial risks, see the need for a risk management strategy, and then buy a policy. Old fashioned sales techniques might get you a client signature, but they’re unlikely to help you build trust and long-term relationships. The risk professional knows the difference between insurance sold and insurance bought and makes sure they engage (and educate) their clients with a personalised approach.
- Cash flow
A detailed cash flow analysis will determine the funding options for a client’s risk management strategy. If you push a client’s budget too far, you can’t blame them if they lapse months later in favour of that vetoed family holiday. If a client can’t afford a recommended insurance policy, rather than dropping the premium (and benefit), the risk professional will instead offer advice around spending and saving, and carefully balance risk against cost to meet their client’s goals. - Superannuation
The risk professional always considers super as more than just an alternative funding option for insurance. They will walk their client through their options, explain the implications of using what is effectively their retirement savings to achieve risk mitigation, and determine the most suitable outcome for their client. At this point, the risk professional will also facilitate discussions with specialists from their network, like tax advisers or financial planners, to accommodate the client’s requirements for a broader scale of advice. - Estate Planning
If you’ve discussed risk, cash flow and super, you might consider your client’s risk management objectives met. But the risk professional knows that the conversation isn’t complete without estate planning. Given that estate planning is a particularly technical field, the right specialist needs to be brought in. So the risk professional will play facilitator; seeking the best help for their client and closing the loop on their financial strategy whilst continuing to stand at the centre of the client’s financial world.
Evolution or extinction?
Longer term business viability is not the only benefit of the risk professional’s approach. They build real relationships with clients, giving them a clear view of their financial risks, a clear understanding of the role of insurance, and a personalised risk management strategy. And best of all, their clients understand the real value of an adviser: advice.
Evolving your approach might be the difference between survival and extinction, so if ever there was a time to change, it’s now. The question is, have you evolved?
Craig Parker is the general manager of Affinia. He has over 20 years of experience in both retail and institutional banking, with a strong focus on strategic planning and continual innovation.
