A group of advisers has blasted comments from NobleOak chief executive Anthony Brown regarding advised insurance policies, saying he has made a “sweeping generalisation” contrary to ASIC’s recent findings.
Risk Adviser’s sister publication ifa on Wednesday reported Mr Brown’s comments at Strategic Insight’s Direct Life Insurance Awards. Mr Brown said customers with life insurance policies attained through advisers were “not getting good value for money” compared to direct policies.
“We do think the industry is broken at the moment. It does need fixing and I know there are big changes but if you go through advisers, you’re not getting good value for money,” he said.
“A lot of direct opportunities are great value for money and lapse rates are high.”
The story generated negative responses on the ifa website, with one person calling Mr Brown’s comments “uninformed, irresponsible and silly”, while another said it “does not deserve a reply”.
“How does providing cheaper premiums, better definitions, upfront advice, ongoing service and claims help qualify ‘as not good value for money’ when using a professional adviser?” a commenter wrote.
Houghton Strategic Solutions director Melinda Houghton told ifa that findings from the recent ASIC review into the life insurance industry showed that claims handling within direct insurance was not as good as the handling for advised insurance.
“If you’re going to say that something is a waste of money, you would also say that paying a premium for something that doesn’t pay out as often is more likely a waste of money,” she said.
“The most recent research is showing that advised insurance is cheaper and pays out more often.
“We’ve actually got ASIC backing us up and we’ve got statistics to show that advised insurance is better for consumers.”