Pro-bono work uncovers advice shortfall

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Mark O’Leary is the 2012 winner of the FPA Future2 Community Service Best Practice award. For the past couple of years, O’Leary and his team have been working with the cancer council to provide advice to cancer sufferers in tough financial situations.

For O’Leary, the work has reinforced his belief in the advice profession, and he says that it is necessary for any adviser that doesn’t understand the comprehensive role advisers should be playing.

“I also use [this work] to show our younger advisers the work we should be doing for clients, because every one of these people that I’ve met have been significantly underinsured. Every one,” says O’Leary.

“There’s a massive focus in our industry on investments. That’s fine, I understand that, that’s critically important. But there’s not as much focus as there should be on the insurance aspect of our work, which is protecting families."

He says that the majority of clients don’t have their mortgage covered and have not considered that they need to cover the cost of education. None of the clients have provided for the on-going income needs of their dependents, resulting in a reliance on Centrelink, and in most cases, the sale of the family home.

“Despite all the complexities of our profession, and all the wonderful and fancy things that we can do for our client, at the end of the day, in this particular area – in estate planning or wills or insurance – our job is to make sure that in the event of the death of the bread winner their families are left debt free and with sufficient income to cover their lifestyle, whatever that means. And that’s different from family to family. I don’t know what the average mortgage is in a family, but you’d generally need a seven-figure policy to do the job properly.”

This particular work is tough, and O’Leary says that it is not suitable for a lot of advisers. You have to be tough and philosophical, he says, because in most instances, one of the people you’re dealing with is going to pass away. The advisers also have to accept that there is not a lot they can do to help the financial situation.

In one case, O’Leary was advising a husband and wife who both had cancer. The husband’s case was terminal, and he had no life insurance, but O’Leary and his team were able to find around $350,000 in insurance through the client’s lost superannuation accounts. The money helped with covering his two children’s’ private school costs and keeping the banks at bay for the next few months, while O’Leary ensured that the recovering wife’s will was up to date, and negotiated with the school to keep the children enrolled.

Not only has the hard work been recognised by the FPA award, but also by O’Leary’s existing clients.

“I know that it’s given us a lot more credibility with our existing clients. People that have been with us for a long, long time are really pleased that we’ve done that and got involved. I think you can’t quantify that.”

  • Sue Laing - the risk store on 6/08/2013 2:35:33 PM

    Yes Therese agree. There is lots of other positive news that should be coming from our industry regarding all the claims that thankfully some clients did make as they did get the right advice. It's high time the insurers got together to publicise this. Until they do the underinsurance will remain, as advisers themselves do more with investments than with insurance. Surely part of the reason for that is that the institutions don't do enough to support advisers in the insurance area! How many PD days for institutionally-owned dealerships have proper, in-depth, balanced proportions of insurance content??

  • Adrian Coles on 6/08/2013 12:22:58 PM

    Congratulations Mark.
    I've been doing this work for only 6 months and totally agree with Mark's comments in relation to the underinsurance problems. Significantly and frustratingly all of these clients have their super in "Industry" funds and have never had any contact with a fund representative in respect of improving their benefits !

  • Therese Stanton on 6/08/2013 9:48:53 AM

    Mark,
    We also do pro bono work for the cancer council and I agree wholeheartedly with your comments. I also know of other advisers who assist as well. Definitely is a tough area, however you also need to be a person that cares about their clients and this is what the majority of advisers are. We just don't hear this in any news reports.
    Good to see some positive news coming out of our industry.

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