Clients turning back on advisers at claim time

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Recent reports that lawyers have been increasingly acting for clients during a claim could indicate that advisers aren’t doing enough to advocate for their customers.

This information comes despite all major life insurance companies reporting large increases in claims on disability and income protection rather than the traditional end of life insurance.

General manager of dealer-group Affinia, Craig Parker, said that the ratio of living to death benefits now sits at a historic high.

However, he said he was concerned that many risk advisers were not stepping up to advocate for customers at claim time.

“The increased involvement of lawyers in claims is worrying because this is a role advisers should be performing on behalf of their clients. The involvement of a lawyer will not influence the decision of an insurer. Claims advocacy is the role of the adviser.”

Parker told Wealth Professional that the huge increase in claims across the life insurance sector is due to dramatically increased awareness and understanding among consumers, which he said is “fantastic”.

However, he warned that advisers must see this as an opportunity to tap into this growing market by having important conversations with their clients from the beginning, rather than just at claim time.

“If that relationship hasn’t been properly built, at claim time [the client] will go to someone else,” he said. “It’s about making sure the right advice solution is put in place, and when that need is there at claim time the adviser can step the client through the process.”

In this initial conversation the adviser needs to make the client aware of how they can help when it comes to a claim, as well as making sure that the client understands the actual product solution and definitions of what it covers.  At claim time the adviser should then be working with the client hand and glove, Parker said.

“The challenge is that from a client’s point of view they only know what they know and if they haven’t been stepped through the right process they will turn to multiple sources. If the adviser is not clearly articulating that right from the start, we’re seeing a missed opportunity.”


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  • Mark Thompson on 18/03/2014 3:18:48 PM

    One of the big problems with claims is that there is not a code of conduct that must be adhered to by the insurer. The Risk Store's CMap claims assessment or any arms length assessment of an insurer's claims process should be compulsory and not a take it or leave it option. I've been involved in a claim which in hindsight should have been dealt with by a lawyer skilled in insurance law (not always easy to find). An enforceable code of conduct would get rid of much of FOS' work.

  • Good advice on 18/03/2014 3:08:21 PM

    I really dont think that is the case.
    Lawyers are now advertising on TV that if people think they might have a claim to contact them and then they will look into the options from their super funds.
    These people with Industry funds if they have gone directly and been refused might use a lawyer as they dont have an advisor and an ISF advisor will not act on their behalf.
    In the case of a large Corporate Fund the instituation or advisor would generally be contacted by the HR manager on behalf of the employee.
    I dont believe that if an individual has purchased a policy that they would first use a lawyer, even if they haven't had a great relationship with the advsor etc as they might have purchased the policy several years earlier and never had it reviewed.
    Any way my thoughts aside what i find absolutely disgusting is when when the IFN suggest that finacial advisors aren't as professional as these lawyers who charge a disabled person or deceased estate up to 33% of what is recieved as a fee for something that would have been accepted or knocked back going directly.
    Advisor fee? Certainly not 33% if anything at all.
    And if the claim is knocked back the member can always use the FOS service which is a free service to the consumer. Shouldn't the lawyer also need to act in the best interest of the client and suggest they try this avenue of recourse first...
    oh sorry i forgot that the lawyer is more professional than us so they dont need to have legislation to act in the clients best interest!!!!!

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