Research confirms inaccessibility of life/risk advice

Australian workers regard financial advisers as a trusted source of advice around life insurance, according to new research released by the Council of Australian Life Insurers.

The research also pointed to the fact that in the past three months, while almost a third of Australians considered seeking financial advice on life insurance, only 8% actually received it.

This prompted CALI to suggest the urgent need for the passage of further Quality of Advice Review changes to enable life insurers to provide simple advice on their own products.

The research found that 48% of respondents would turn to a financial adviser or planner for information on life insurance, compared to 36% who would go direct to the insurer and 31% wo would rely on family and friends.

Interestingly, the survey found that just 26% of respondents would seek the information from their superannuation fund.

However, the survey also revealed that midlife career workers (those aged 35-54) were more likely to seek advice from their superannuation fund and less likely to seek advice from family, friends or social media.

It found that the majority of workers approaching retirement (those aged 55 to 64 years) showed a strong preference for consulting a financial adviser or planning or directly contacting their insurer.

“This is consistent with a need for tailored advice that is specific to their circumstances to better secure their retirement savings and manage existing assets effectively before leaving the workforce,” the survey analysis said.

“More choice on where to obtain financial advice is required to give Australian workers the confidence they need to access reliable, affordable advice to plan for their future.”

“Lack of knowledge and misconceptions about life insurance products result in reduced consumer awareness and lower levels of trust among some cohorts.”

The analysis said people without dependent children are less likely to seek out life insurance products than people with children. Similarly, those who still have a mortgage are less likely to invest in life insurance than those who own a home outright.

Commenting on the research, CALI chief executive, Christine Cupitt said the report highlighted that Australia’s life insurers provide a fundamental safety net and pathway for people to secure their future, no matter what happens throughout their lifeitmes.

Cupitt also said that an advice accessibility crisis exists in Australia.

“In the past three months alone, almost a third of Australians considered seeking financial advice on life insurance, but just 8 per cent actually received it,” she said.

“The report highlights the critical need for the passage of tranche two of the Federal Government’s Delivering Better Financial Outcomes legislation, which would allow life insurers to provide simple advice on their own products when customers ask them to.”