Following my opening address at the LOA Convention yesterday I have come to
realize that some delegates may have been left under the impression that I
was proposing that life insurers restructure their products in such a way
that financial advice becomes less essential.
I would like to state that I have always been a strong promoter of
intermediaries and the important role they play, as I clearly stated at the
recent Financial Planning Conference in front of 1 200 intermediaries. I
have not changed this view nor am I suggesting that the industry gets rid of
advisers. I also acknowledge that intermediaries play a critically important
role in getting the life industry's products to customers.
For the purposes of my presentation I differentiated between product advice
and financial planning. Perhaps I did not make this distinction clear
enough, and if this left room for misinterpretation I apologise for that.
I firmly believe that many of our life products are far too complex and
therefore require substantial product advice. If life companies simplified
their product offerings significantly, advisers could spend more time
focusing on valuable financial planning, goal setting and educating
consumers on the importance of saving. Less time would than have to be spent
on the arduous and costly task of trying to make sense of and comparing
complicated products.
The message that I had wanted to leave delegates with was that the life
industry needs to simplify products and distribution models, and that
legislation had to be simplified, with the aim of shifting the focus of
advice away from products and more towards the real needs of the consumer.