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Wealth Advisors Will Retain Clients By Offering Insurance Advice - Study

Tom Burroughes, Group Editor , March 16, 2018

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A study in the US said that families and individuals might switch advisors who aren't addressing property and casualty insurance needs.

US families and individuals want their advisors to address property and casualty insurance and a large chunk would switch advisors if such help was offered – suggesting strong potential to plug this gap. 

The results came from a study of 200 “successful” US individuals and same number of advisors by Chubb, the insurance and risk management firm, and Oliver Wyman, the research and consultancy. The study found that more than three-quarters of HNW individuals surveyed want property and casualty insurance needs addressed by their advisors but only 28 of them said such persons do so. 

Nearly 40 per cent of survey respondents would consider switching to a financial advisor if they provided property and casualty support.

The research paper is called “The Overlooked Gap in Financial Advice.” 

With 85 per cent of survey participants reporting heavy reliance on their advisor to help them navigate all financial matters, client retention can dwindle if they feel they’re not receiving adequate support, the authors of the report said. 

“As noted in our research, the wealth management industry is in the midst of disruption,” Ori Ben-Yishai, executive vice president and chief marketing officer at Chubb North America Personal Risk Services, said. “While change can be unnerving, many leading financial advisors will seize this unique opportunity to provide greater client value, which centers on helping them address their clients’ P&C insurance needs.  This approach is complementary to traditional guidance and provides yet another safeguard to help successful individuals manage accumulated wealth holistically,” Ben-Yishai said.

For some time, it appears that forms of insurance that should form an overall part of the wealth management toolkit aren’t necessarily appreciated by wealth managers, possibly because they see little incentive to examine products or suggest them to clients. For example, WealthBriefingAsia, sister news service to this one, has noted that critical illness cover has potential to be seen by wealth managers as a useful service in Asia. 

More broadly, and in several regions including North America, the wealth management “toolbox” has already seen development of what are called private placement life insurance policies in recent years. These are structures directed at wealthy individuals enabling them to create tax-efficient, arm’s length portfolios and are recognised in a number of jurisdictions. (Players in this field include Swiss Life, Vie and Lombard International Assurance.)




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