In the age of the ‘informed buyer’, customers may prefer non-advised sales in order to feel more in control of the process
There has been a long-running debate over advised versus non-advised broker sales in terms of which is the better model or in the best interests of the customer.
Broking giant Gallagher, for example, has been vocal in its disdain for what it regards as a dumbed-down non-advised approach to general insurance sales and is keen to push the advised route. Many of the big brokers have invested heavily in risk modelling, analytical capabilities and training, so it is not surprising when they defend advised sales so heavily.
But we have seen other brokers generate significant value from the non-advised route.
One only has to consider the recent sale of Simply Business to Travelers, for a ridiculously high earnings multiple, to see the value placed on a technology-driven, non-advised SME sales business model.
Providing advice is of course one area where a broker can add value to the customer experience. Indeed, advisory skills are what set brokers apart.
But it can be argued that we are living in the age of the informed buyer: one with more choice and access to information than ever before, and who may prefer a non-advised sale in order to feel more in control of the process.
That said, it is not a case of which model is best but more about adopting an approach that makes sense for the customer, offering them choice and dealing with them in the way they want to be dealt with.
It may seem like I am sitting on the fence but in fact I am sitting firmly on the side of treating customers fairly and giving them what they want, in terms of both product and experience.
The age of online and aggregator sales is here to stay but brokers will always have a role to play in offering a valuable service to those who need and want it.
Geoff Hall is managing director at Berkeley Alexander