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A business consultant has suggested that young risk advisers take up mortgage broking as a way to drum up more business amid concerns that the Life Insurance Framework will inhibit new entrants to the risk industry.
The Life Insurance Framework has sparked concern among many advisers that, should the reforms be introduced in their current form, many younger advisers will find it difficult to set up businesses that specialise in risk.
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Speaking to The Adviser’s sister publication, Risk Adviser, Audere Coaching & Consulting founder and business coach Stewart Bell said that for these younger advisers, mortgage broking may be the key to help generate additional cash flow and bring in more clients.
People, especially younger clients, are always looking for houses and need loans, so advisers can use mortgages as a means of opening a discussion around risk insurance, Mr Bell said.
“If you are a young adviser and the [younger] demographic [is whom] you are targeting, you would probably look at mortgages as something that is going to get you in there,” he said.
Mr Bell said the life insurance reforms may see people reach out to consulting services to help with the transition; however, he added that “a lot might pack up” and move out of the industry.
Businesses with a very specific client base or those that specialise in writing policies in the business insurance space will find it much easier to navigate the changes, he pointed out.
“I think those businesses will be thinking 'I am super specialised and we’ll ride this out no problem at all',” Mr Bell said.
“I know a lot of businesses who are really strong in the business insurance space – so they do the insurance but it is part of a bigger piece – and I can’t imagine that they would [have a problem] when they are pulling in large premiums.
“It will be those businesses in the generic transactional space ... where the problems will occur,” he said.
