Record numbers of financial planners are offering insurance products and commandeering a slice of insurance brokers’ traditional market, according to new research.
The new research by Investment Trends, released to Money Management, found that 93% of planners now provide risk advice, up from 73% in 2005, and typically spend a fifth of their client time (20%) discussing insurance needs, up from 17% last year.
The Investment Trends research also found risk advice now accounts for a third of the revenue financial planners are currently generating.
“Empirical evidence demonstrates the importance of risk advice in the current climate, especially in driving profit growth,” Investment Trends senior analyst Recep Peker told Money Management.
“Our analysis shows that planners reporting an increase in practice profitability derive a greater proportion of their revenue from risk commissions than those who said their practice profitability declined.”
The Investment Trends research also found that major insurance providers had moved to meet the needs of the planner community, resulting in higher levels of satisfaction.
It found that the number of planners rating their insurer “good” or “very good” had increased from 77% to 82% over the past year.
“With planners demanding further enhancements to underwriting and technology, these areas will continue to be key battlegrounds for insurance providers over the next 12 months,” added Peker.