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Analysis: The cheap way to lose clients


Why is it that so many advisers recommend the cheapest critical-illness plan? It might be because it is the easiest plan to sell because presenting a table showing competing insurers with the cheapest at the top enables an adviser to highlight a known advantage which, unlike quality comparisons, is solid and easily recognisable.

However, the title ‘financial adviser’ signifies just that: using skills and knowledge most consumers do not possess to arrive at a measured and advised solution.

A degree of hard work is required to make a comprehensive assessment based on the client’s circumstances. Some advisers are concerned about creating a fully compliant report to support their recommendation. It might be they cannot adequately relate the differences between contracts and cannot accurately gauge whether an included condition carries any real value.

Advisers can undertake this time-consuming task themselves or use specialist websites. Altern-atively, they can continue to advise that the cheapest option is best and then find other, more savvy, advisers are capturing their clients.



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  • Chris Hulme 30th April 2015 at 12:07 pm

    Absolutely right Alan. It’s no different with IP either. With ever more complex product structures to consider long gone are the days of selling on price.
    You only have to experience handling a claim for a client to see where the benefits really lie and you’ll never go cheap again!
    The industry is fortunate that many ‘advisers’ who sold cheap policies are no longer in the industry but that is also unfortunate as they are no longer here to pick up the pieces and share the pain of their failings with the client.