Too many risk advisers are worried about offering the best products to their clients instead of focusing on the type and level of cover, argues a risk specialist business consultant.
Speaking to Risk Adviser, Chris Unwin Training and Consulting Services director, said advisers believe in order to act in a client’s best interests they need to recommend the best products.
“Risk advisers that I speak to are paranoid about whether they are recommending the best product or the best company,” Mr Unwin said.
“The answer is it doesn’t exist, because it is crystal ball gazing. We are only going to know what the best product is when something happens to them,” he said.
Mr Unwin explained if advisers spent more time focusing on the types and levels of cover there would be a much better insured population.
“When push comes to shove the sum insured makes the financial choices it is not the flag you fly over the product,” Mr Unwin said.
“I would go as far to say that 95 per cent of all legitimate claims would be paid by any of the products offered by any of the five major companies, because [the] difference [lies] in a subtle definition,” he said.
Mr Unwin pointed out if advisers use a methodology where they find out what a client wants covered and makes recommendations based on what types and level of cover they’d have to achieve those outcomes it would lead to better outcomes during a claim.
“It is where you are suggesting to clients what they need that you are potentially creating a mine field for yourself,” Mr Unwin said.
“But down the track [if a] claim comes along and as it turns out they are underinsured well then they can actually turn around and say 'Well this isn’t what I told the adviser what I wanted, it is what the adviser told me I needed',” he said.