Matt Lippiatt

New research released by MetLife Australia reveals ‘commission’ isn’t the dirty word we think it is and suggests financial advisers should consider implementing a range of payment options to suit the individual needs of clients.

Now in its second year, the MetLife Adviser-Client Relationship Report 2019 is the largest quantitative study of its kind and includes insights from consumers and Small to Medium Enterprises (SMEs) with up to 20 employees who have life insurance purchased through a financial adviser and consumers who are very likely to see a financial adviser about life insurance in the next two years.

The research found that for the majority of consumers (78%) with life insurance purchased through an adviser the preferred payment structure for future advice was an upfront fee for advice if that meant lower premiums over the lifetime of the policy. When asked what types of advice consumers would be willing to pay a fee for, the top drivers cited were building up investments (54%), saving for retirement (50%) and getting life insurance (46%). For SMEs, the top reason for seeing a financial adviser was seeking out life insurance (59%).

Further, these findings indicate consumers have a range of preferences when it comes to paying for financial advice, highlighting the importance for advisers to consider offering a variety of payment structures to clients.

The research also pointed to a lack of awareness around the commission advisers earned, with just over half (55%) of consumers unaware of the amount of commission their financial adviser receives. Despite this, when asked if removing commissions would impact the likelihood of seeing a financial adviser, nearly half of consumers indicated they would not expect the removal of commissions to change their willingness to see an adviser, while only one in five (19%) said it would make them more likely to see an adviser.

With the Australian government considering the removal of commissions, it is important to understand how this may impact the degree to which consumers are insured. Nearly three quarters (72%) of consumers thought removing commissions would result in more people being underinsured, which may be due to the perception that this would lead to higher up-front fees resulting in people choosing lower levels of cover.

Matt Lippiatt, MetLife Australia Head of Adviser Experience, said: Our industry has traditionally operated on a commission-for-advice model which has proved to be a highly effective charging method, however it’s clear from the research that customers are looking for options when it comes to how they pay for their financial advice.

There’s a growing number of consumers who are interested in fees as an alternative payment structure for risk advice which means it’s important for advisers and product manufacturers to offer consumers multiple options when it comes to paying for financial advice. Consumers don’t have a problem paying for their insurance advice by way of a commission taken from the product, but there is an opportunity for greater education around how they work.

Advisers who are embracing highly transparent charging models and have systems in place to continuously educate clients about the value they provide seem well placed to thrive in this environment.

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Matt Lippiatt

Life insurance provider MetLife Australia has released a new report revealing a disconnect between perceptions of cost and value when it comes to insurance and financial advice.

Now in its second year, the MetLife Adviser-Client Relationship Report 2019 is the largest quantitative study of its kind and includes insights from consumers and Small to Medium Enterprises (SMEs) with up to 20 employees who have life insurance purchased through a financial adviser and consumers who are likely to see a financial adviser about life insurance in the next two years.

This year’s research revealed that advised Australians are more informed about their insurance than last year, with more respondents able to state their level of cover, premium amount paid, as well as explain the difference between stepped and level premiums.

Despite this, confusion around the value of expert financial advice remains, suggesting there is an ongoing need for financial advisers to demonstrate their value by properly educating clients of the benefits of the service. This is especially critical given 3 in 10 consumers and 5 in 10 SMEs report they are considering either changing their current adviser, or ceasing to use one completely, citing high premiums, lack of affordability, no ongoing need for insurance or a lack of contact as their top reasons.

Understanding of insurance remains low among consumers and SMEs. Of those surveyed, 40% of consumers thought life insurance bought through an adviser is more expensive than a policy they could buy directly online or through a superfund but only a third of consumers believed the product was better quality.

The research found consumers and SMEs were willing to pay an average upfront fee of $1,700 for insurance advice. This is below the average cost to deliver quality financial advice, suggesting there is a critical need to retain commission-for-advice as a way for people to pay for these services.

Awareness of what advisers do and what those services should cost is low. Part of the battle for financial advisers is how to make the long term gains to be had from seeking expert financial advice more tangible in the short term.

Advisers who are successfully bridging this gap appear to be setting and agreeing on realistic expectations for both clients and advisers in initial meetings. Further, they are working closely with their client like a partnership and demonstrating ongoing care and value through simple measures such as annual reviews and contacting clients at important times in their lives, such as buying a house and having a baby.

In making a concerted effort to demonstrate the value of tailored financial advice through ongoing and transparent communications, financial advisers can help tackle some of the biggest misperceptions that inhibit consumers and SMEs from seeking out the services of financial experts.

Matt Lippiatt, MetLife Australia Head of Retail Sales, said: “The recent spotlight on the financial services industry has caused clients to take a more active interest in the financial products and services they hold and question the value they’re getting from these relationships which can perhaps explain why Australians know more about their insurance cover this year.

But this year’s research has found there’s still a lot of confusion about insurance and the true benefits of seeking out expert financial advice.

As with any service that doesn’t provide an immediate pay off, it can be hard for consumers to appreciate the value of seeing a financial adviser. Sometimes this realisation only comes well down the track as life unfolds and the unexpected happens.

Given this, a key challenge for financial advisers is demonstrating value right from the outset of a relationship and reinforcing this value over time through open and regular communication.

If there’s a key takeaway from this research it should be that there is no such thing as a ‘set and forget’ client anymore. Client engagement should be the number one priority on every adviser’s business plan for 2020.”

Key findings:

• Confidence levels amongst consumers and SMEs in being able to explain various life insurance features have increased across the board in 2019
• 3 in 10 consumers and 5 in 10 SMEs report they are considering either changing their current adviser, or ceasing to use one completely, listing high fees, lack of affordability, no ongoing need for insurance or a lack of contact as their top reason
• The top reasons for people to see an adviser about life insurance is to ‘protect their family’, followed by ‘receiving a recommendation from a family member or friend’
• Consumers and SMEs are willing to pay an average of $1,700 for insurance advice
• 40% of consumers thought life insurance bought through an adviser is more expensive than a policy they could buy directly online or through a superfund and only a third of consumers believed the product was better

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John Ashton has been appointed Head of Retail Product, managing product strategy and strengthening the team’s senior experience. John has more than 30 years’ experience in the industry having worked across licensees, insurance, underwriting and product design for a range of players in the industry. Based in MetLife’s Melbourne office, John will lead the optimisation of MetLife Protect, tapping into adviser and client feedback – a hallmark of MetLife’s approach to the Retail market.

Also joining the team is Dave Evans, as Strategic Account Manager, focused on the licensee platform, as the sales team moves into the next stage of growth. Dave has over 20 years’ financial services sales experience and is based in the Brisbane office. With MetLife Protect continuing to gain traction among licensees, the Retail market is responding positively to the innovative and fresh approach MetLife has offered up. Dave will drive this next phase of growth for the business.

Matt Lippiatt, MetLife Head of Retail Sales, commenting on the announcements, highlighted the breadth of experience being added to the team: “We are delighted to welcome John and Dave to the business. They are both seasoned Retail insurance professionals who are well known to advisers and licensees alike.  Their deep experience will help us shape our offer and drive our engagement with the market as we continue to accelerate our growth.

“At a time of consolidation, MetLife is committed to backing advisers.  These appointments are one more example of that commitment.”

MetLife Protect is a modular life insurance product, launched in August 2018, which allows advisers to tailor policies to their clients individual needs and is flexible enough to change with them over time.

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MetLife Progress has been created to advocate for greater diversity in the advice industry.

MetLife Australia and the Association of Financial Advisers (AFA) yesterday launched MetLife Progress: Professional Development Grant for Women. MetLife Progress has been created to advocate for greater diversity in the industry by helping women in financial advice achieve their career goals.

The inaugural 2019 grant round will offer up to 15 professional development packages, which include a 2019 AFA Conference registration, attendance at AFA events including Masterclasses, and ongoing events along with networking and support from MetLife Australia.

AFA CEO, Philip Kewin, said the AFA has partnered with MetLife to deliver professional development activities such as learning opportunities, mentoring and networking. “The AFA has a long history of encouraging women in financial services, including the launch of the AFA Inspire community of practice in 2013 which connects and supports women in the profession.”

MetLife’s Head of Retail Sales, Matt Lippiatt said, “We are big supporters of quality financial advice because we believe it enables people to lead better and more prosperous lives. We want financial planning to become the career of choice for high calibre women in Australia, so that the profession can attract and nurture more great talent. MetLife Progress is one of the practical ways we’re supporting the growth of women in financial advice and helping them as they start out on a career long journey of learning.”

Early in 2019, MetLife was announced as the first insurer to join the UN’s Women’s Global Innovation Coalition for Change – a coalition which aims to advance diversity and promote inclusion. This grant is another way MetLife is supporting diversity.

Applications for MetLife Progress open Monday 24 June, and close on Friday 12 July.

To apply, applicants must:

• Identify as female
• Have up to five years’ experience as a financial adviser, planner or paraplanner as at 24 June 2019
• Not previously have attended an AFA Conference
• Have or obtain AFA membership.

For more information, and to apply, please visit afa.asn.au.

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Matt Lippiatt

The majority of millennials (92%) feel confident about their future financial situation but may be unprepared for the possibility of unemployment due to injury or illness. New research from MetLife reveals that six in ten (63%) millennials without an adviser and five in ten (54%) advised millennials could only maintain their current lifestyle for a maximum of six months if they suffered illness or injury.

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Matt Lippiatt

As the financial advice industry puts the spotlight on adviser education and technical competency with the release of the FASEA revised standards, soft skills remain a priority for clients, according to research from MetLife Australia.

The MetLife Adviser-Client Relationship Report 2018 examined attitudes to purchasing life insurance through a financial adviser, surveying consumers and small to medium enterprises (SMEs) with up to 20 employees.

The research proved what many advisers have intuitively known for some time – that soft skills, like communication and the ability to show you genuinely care, are the keys to developing and maintaining long-term trusted partnerships with clients.

The research found that the top three attributes of an adviser for both consumers and SMEs to maintain their ongoing relationship all relate to soft skills: ‘Genuinely cares about me’; ‘Speaks to me in easy to understand language’; and ‘Honest and trustworthy’.

The research also showed around 60% of all respondents rated their adviser’s overall performance as ‘very good’ or ‘excellent’. This was driven by their adviser rating very highly on soft skills such as speaking in easy to understand language (65%), being honest and trustworthy (65%), genuinely caring (55%) and providing regular communications (50%).

Commenting on the research, Matt Lippiatt, MetLife Australia Head of Retail Sales, said: “At a time when trust in institutions generally is pretty low, our research shows that people still have deep trust in their adviser to care for them.  The introduction of the FASEA standards will raise the level of formal education across the industry but we mustn’t lose sight of just how much consumers and SMEs value advisers’ interpersonal skills – listening, being sensitive to a clients’ individual situation and communicating regularly and clearly,” Mr Lippiatt said.

“It’s these soft skills that empower advisers to offer their clients a personalised service, that has real value to them. Consumer expectations are increasing rapidly across most service sectors and it is no longer enough to just be technically competent. People want to have a true relationship with their adviser and it takes a certain set of skills to be able to foster and grow that partnership over time, and engender trust.”

Another key finding of the report was that ongoing communication preferences differ widely by age and client type.

Overall consumers in the 18-39 age group are more likely than other groups to prefer email (84%) or message/text (18%), while those aged 60+ are more likely to prefer face-to-face (52%) or phone call (47%) than other groups.

These results differ for the SME group, with younger clients preferring contact by phone call (53%) and older clients preferring email (80%).

When MetLife asked consumers and SMEs where their adviser had ‘added value’ and made them want to stay with them, the responses received supported the need for the soft skills and developing a partnership, including showing care, listening, providing education, being available, and receiving regular check-ins. In addition, 9 in 10 want to hear from their adviser at least every 12 months about life insurance, regardless of their circumstances changing.

However, should these soft skills be lacking, at least in the minds of their clients, the research revealed that they won’t hesitate to change advisers. This is particularly true for SMEs, with 45% having intentionally stopped using an adviser in the past, along with 26% of consumers. These clients haven’t stopped using an adviser, and still see the value of advice, they simply sought out a change. When asked about the key reasons for the change, insufficient trust, poor service, difficult to deal with, and a lack of communication were all given as reasons.

“Overall, clients who receive thoughtful communication and timely reassurance from their financial adviser are not only more loyal but more likely to refer, emphasising the importance of advisers’ soft skills in growing their client base,” Mr Lippiatt said.

“What is evident is that regular communication is essential for a successful adviser-client relationship, but this communication does not always need to be a sit-down meeting in an office. Regular check in calls, text messages, tailored newsletters or even a birthday card are all appreciated by clients. The best advisers we see are tailoring communications to clients’ individual preferences and using technology to enable them to build better engagement and rapport.”

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MetLife has made key hires across the country bringing the sales team to 10, recruiting:

• Marcus Chan, Sales Manager New South Wales
• Aaron Nugent, Sales Manager Queensland
• Patrick Murphy, Sales Manager Western Australia and South Australia, and
• Stephen Nyabadza, Sales Manager Victoria.

The appointments give MetLife nationwide coverage to support and serve the adviser community.

Matt Lippiatt, Head of Retail Sales, said: “We’re a people business. We want every single adviser who works with us to have a one-on-one relationship with somebody at MetLife who cares for them and whom they trust to deliver great outcomes for their clients. Marcus, Aaron, Pat and Stephen bring energy, experience and insight to our team and will enable us to work with even more advisers around Australia.”

The appointments come just four months after the launch of MetLife Protect, a modular life insurance product helping financial advisers meet the needs of small to medium enterprises and families. Demand for the product has meant that MetLife has needed to bolster the team.

“The response from advisers to our launch has been terrific. MetLife is here for the long term, and we see tremendous opportunities for the advice community and the valuable service they deliver.  We will continue to differentiate ourselves in the market by investing in great people and making sure we have the right support for our adviser community across the country,” Lippiatt said.

Marcus Chan joins MetLife from the BT Group bringing over 10 years experience in the financial services industry, and is highly regarded within the adviser market.

Aaron Nugent also comes to MetLife from the BT Group with over 7 years financial services experience, having developed capabilities in specialist risk and previously working as a financial adviser.

Patrick Murphy brings over 10 years experience in financial services and joins from AMP, where he was focused on business development for the group’s platform and insurance offers.Stephen Nyabadza has joined MetLife from CommInsure and draws on over 11 years of experience in financial services, with specialist knowledge across insurance and financial planning.

“We’re delighted to be expanding our team at this exciting time for MetLife. I know their experience and passion will be key to driving our success in the adviser market,” said Lippiatt.

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Matt Lippiatt

While an annual review with an adviser is essential to ensuring clients understand their life insurance, and it’s what they’re asking for, only half of advisers are doing regular reviews, according to a new report by MetLife Australia.

The MetLife Adviser-Client Relationship Report 2018 examined consumer and small to medium enterprises (SMEs) attitudes to purchasing life insurance through a financial adviser, surveying consumers and SMEs with up to 20 employees.

The report found that 86% of people want to be contacted by their financial adviser every year. However, 56% of consumers and just over 50% of SMEs had conducted a review of their life insurance with their adviser in the past 12 months. Around half of those modified their insurance cover as a result of that review. This indicates annual reviews help clients understand and keep their insurance up to date with their changing circumstances.

Having a regular review also makes both groups much more likely to refer their adviser to family and friends. Undertaking an annual review increases the Net Promoter Score (NPS) to +30 for consumers and +9 for SMEs, compared to a respective -25 and -20 without a review.

Commenting on the findings, Matt Lippiatt, MetLife Australia Head of Retail Sales said: “Many advisers are missing a trick by not talking to their clients on an annual basis. Our research showed that people want their adviser to show they genuinely care and they want to be kept up to date on a regular basis. An annual review delivers on both of these attributes. It helps to build trust – another essential ingredient in a successful adviser-client relationship.”

“Reviews are crucial to the ongoing relationship, with the NPS results showing they dramatically increase client satisfaction and likelihood to recommend for both consumers and SMEs. This indicates an opportunity for advisers to check in regularly with their clients on their insurances, and to reinforce their value. Advisers have told us doing an annual review leads to increased referrals.”

The research also found that SMEs have higher expectations than consumers when it comes to the annual review process. Just 41% of SMEs rated their annual review ‘very good’ or ‘excellent’, compared to 62% of consumers.

“Overall we found SMEs demand a higher level of service than the consumer group. They are likely to be highly engaged with reviewing their own business on a regular basis, and when it comes to their insurance they are looking for a personalised service from their adviser to fit their individual requirements.”

“Ultimately, well-structured annual reviews benefit both clients and advisers. This is a great opportunity for advisers to strengthen their relationship with their clients, demonstrate they genuinely care about them, and reinforce the quality of their advice,” Mr Lippiatt said.

MetLife Australia recently launched MetLife Protect, a modular life insurance product enabling financial advisers to meet the needs of SMEs and families. The product is designed to be tailored and flexible over time to meet specific and evolving individual needs. For more information, visit https://www.metlife.com.au/partnerships/advisers/metlife-protect/

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Matt Lippiatt

Over a third of small to medium enterprises (SMEs) do not have a succession plan in place and almost half say their business would only be able to operate for up to a year if they were unable to work, according to a new report by life insurance company, MetLife Australia.

The MetLife Adviser-Client Relationship Report 2018 examines attitudes to purchasing life insurance through a financial adviser, surveying 200 SMEs with up to 20 employees as well as consumers (1,000).

Positively, 63% of SMEs surveyed have Income Protection insurance, while 58% have Death cover and 55% are insured for Total and Permanent Disablement. However, a much lower number have Key Person (35%), Trauma (30%) and Buy/Sell insurance (27%), leaving their businesses vulnerable.

Commenting on the findings, Matt Lippiatt, MetLife Australia Head of Retail Sales, said while SMEs were more engaged with their insurance than consumers generally, there were signs that underinsurance was still a worrying issue.

“SMEs are the lifeblood of the Australia economy, making up almost 40% of GDP1 , but these results show that many are leaving themselves exposed to financial hardship or even business failure if they experienced any business interruption,” he said.

The MetLife Australia study found regular reviews with a financial adviser can help SMEs to be better prepared. Eight in 10 have a better understanding of insurance as a result of seeing an adviser, while over half of SMEs who have had an annual review with an adviser altered their insurances as a result. Furthermore, a third of SMEs are ‘somewhat likely’ or ‘very likely’ to purchase cover they don’t currently have in the next two years.

“Small businesses are often misunderstood by the insurance industry as they have unique needs and there shouldn’t be a one-size-fits-all approach. Therefore having a trusted adviser who can provide education on the right type and structure of insurance cover related to their business can make a big difference to this group,” Mr Lippiatt said.

Overall, the study found that SMEs have higher expectations than consumers when it comes to service from their adviser, particularly given many are reviewing their own business on a regular basis. Over four in 10 have intentionally stopped using an adviser, citing price, poor advice, lack of contact, difficulty dealing with their adviser, and a lack of value for money, compared to a quarter of consumers. While it’s clear from the research that SME’s see the value of advice, if they aren’t happy about their advice experience, they aren’t afraid to make  a change.

However, SMEs are also a loyal group when they find the right adviser. A high number (40%) of SMEs have been with their adviser for five or more years, with many likely to recommend their adviser due to their trustworthiness, honesty, genuineness, effective advice, experience, accessibility and overall responsiveness and communications.

“Small business owners are time-poor, and they’re looking to their adviser to show them genuine care and give them value-added services such as home / office visits (including after hours), negotiating with insurers on their behalf, regularly reviewing their cover and putting in regular calls and emails to ‘check in’. Providing excellent, personalised service makes this group more loyal and helps them get real value from their adviser. SMEs need to find the right adviser, one they can trust, that understands their needs and helps them future proof their business through effective plans,” Mr Lippiatt said.

MetLife Australia recently launched MetLife Protect, a modular life insurance product enabling financial advisers to meet the needs of SMEs and families. The product is designed to be tailored and flexible over time to meet specific and evolving individual needs.

[1] McKinsey&Company – SME insurance in Australia (October 2017)

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Matt Lippiatt

Honesty and trustworthiness are the top attributes consumers and small business owners look for in a financial adviser, according to new research released by MetLife Australia.

Furthermore, those who have established trusted relationships with their adviser say the Financial Services Royal Commission will have no impact on their advice relationship.

The MetLife Adviser-Client Relationship Report 2018 results released today examine consumer and small to medium enterprise (SME) attitudes to purchasing life insurance through an adviser, based on a survey of consumers who currently use an adviser, consumers considering seeing an adviser in the next two years, and SMEs with up to 20 employees.

Matt Lippiatt, MetLife Australia Head of Retail Sales, said there were marked similarities between all three groups.

“Across the board, consumers and SMEs want to establish a genuine relationship with a financial adviser they can trust,” he said. “They clearly value the adviser who goes the extra mile to listen to them, understand their needs, and communicate regularly and clearly.”

Transparency and experience also rank as key reasons for selecting an adviser. Once the adviser-client relationship has been established, consumer and SME clients expect their adviser to genuinely care about them, speak to them in easy to understand language, and maintain that honesty and trustworthiness.

MetLife Australia also examined consumer and SME attitudes to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which has generated negative press for some advisers.

When asked about the Royal Commission, just over half of consumers (56%) and over a third of SMEs (37%) said it would have no impact on their advice relationship. Further, 38% of SMEs and 20% of advised consumers said it would make them even more likely to visit their financial adviser.

“What’s clear from these numbers is that the Royal Commission has put the spotlight on the need for quality advice and its enduring appeal,” Mr. Lippiatt said.

“Given that as many as four in 10 consumers and SMEs have been with their adviser for more than five years, it seems that many clients have established a high level of trust and confidence in their adviser’s integrity and abilities.”

Overall, the MetLife research data shows that Australians are reasonably happy with the service they’re receiving from their financial adviser, with 61% of consumers and 59% of SMEs rating their adviser ‘excellent’ or ‘very good’. Just 13% of consumers and 11% of SMEs rate their adviser ‘poor’ or ‘fair’.

“We’ve seen a lot of negativity about financial advice in the media, but consumers and SMEs are both telling us that there are good advisers who are doing a great job,” Mr. Lippiatt said.

“However, given that the majority of Australians currently don’t have an adviser, the challenge for us as an industry is to make financial advice more affordable and accessible to the people who need it.”

MetLife recently launched MetLife Protect, a modular life insurance product enabling financial advisers to meet the needs of families and SMEs. The product is designed to be tailored and flexible over time to meet specific and evolving individual needs. For more information, visit: https://www.metlife.com.au/partnerships/advisers/metlife-protect/

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