Life Expectancy Use in Financial Planning

31. October 2014 08:58 by Kelly in   //  Tags:   //   Comments (0)

One commentator in the UK has described the use of life expectancy in financial planning as "useless" pointing out that:

"...the average life expectancy for a 65-year-old male is 86.5 but 22 per cent of men aged 65 will live to see their 95th birthday."

That is a valid point, but there are some unasked further questions there. One is the likely distribution of cash use over retirement, and for what purposes. Another is the question of risk. Risk is ever present in financial planning, and life duration risk is present too. 

Cash allocation over retirement might, for example, see a client elect to spend more in early retirement (age 65 through to 75 or even 80) because they know that they will enjoy greater health. 

Thinking about risk means we need to ask client what their tolerance is. Should we be planning for no consumption of capital. You might term that as a 'no risk' approach, but it is also a 'lowest income' approach.

For me the lesson is that while Life Expectancy is of limited use on its own in financial planning it is hard to see how it can be left out. At the very least the client should decide to rule it out themselves and clearly understand that reducing the risk of running out of cash in retirement also has the effect of reducing their income.  

You can read the rest of the Money Marketing article by Tessa Norman at this link

Life Insurance Funding Funerals

30. October 2014 14:00 by Kelly in   //  Tags:   //   Comments (0)

"A fifth (22%) of people fund their funerals through life insurance policies, research by Royal London has found."

Note that is any kind of life insurance, not just funeral plans. You can read more in this Cover article by Thomas Smith. Link

Getting to The Point

30. October 2014 08:58 by Kelly in   //  Tags:   //   Comments (0)

One of my favourite stories is one financial adviser who, when talking to a couple, points at one of them and says "Bang, You're Dead" and turns to the other and says "Now, how are you going to manage financially?" 

What I like most about this is that it gets right to the point, without too much getting lost in the detail. The detail comes after the response to that question. 

It reminded me of this piece at Seth Godin's blog, about getting your audience to care enough to go and look up the details themselves. Link

Latest Goodreturns Piece - On the Financial Advisers Act Review

29. October 2014 14:59 by Kelly in   //  Tags:   //   Comments (0)

You can check out Russell's latest piece, all about how to have real input into the Financial Advisers Act Review, at this link

ACC: Incredibly Contrasting Headlines

29. October 2014 10:53 by Kelly in   //  Tags:   //   Comments (0)

For two sharply contrasting views of the same data from ACC take these two headlines:

A Big contrast ACC

If you read each article (NBR hereTVOne here) you will appreciate that these views are based on exactly the same data. What's missing is a restatement of exactly what ACC is for, and therefore the context to those numbers. 

Advisers No Dinosaur - Channel Complexity Here To Stay

23. October 2014 14:26 by Kelly in   //  Tags:   //   Comments (0)

One UK insurance sales business has created a storm by placing a "financial adviser" in an exhibit with dinosaurs. But they are wrong; it seems hard to argue that the role of advisers will shrink: rising complexity and legal requirements appear to be entrenching advisers, not eliminating them. 

Regular readers will know that I am a supporter of online services, and see direct sales as a valid way to buy many, many, products - but I am a committed supporter of advice and advisers. I am also closely involved in Quotemonster, where we say "It's no dinosaur."

I was asked about this recently by a journalist. I pointed out that although many people get their first insurance policy from a bank, virtually no financial advisers would sell a policy as limited as most direct plans are to a client. Clients will get a better policy in almost all situations from a financial adviser. The one they bought direct was okay, probably fit for purpose, and much better than nothing, but can usually be substantially improved on. Advisers do that. 

Also, around the world, advisers are being legislated into the financial lives of millions. Here in New Zealand only an AFA can provide personalised advice on KiwiSaver, for example, and is on record as saying it wants the involvement of advisers in complex financial decisions. 

Add to that the world of online comparison is coming under increasing regulatory scrutiny, and it looks like the distribution model for the future simply is not binary where one channel wins and another loses. The world is more complex. Different groups of clients will continue to want different services depending on their situation, ability to pay, and the regulatory structures applied to different kinds of products / advice processes. 

Why Adviser Businesses Struggle to Grow

22. October 2014 08:23 by Kelly in   //  Tags:   //   Comments (0)

Last week we published a slide show on the reasons why adviser businesses often struggle to grow. It turned out to generate a lot of interest online and has been viewed quite a few times by Twitter and Slideshare users. In case you missed it, here it is. 

Reminder of Next Weeks Roadshows

21. October 2014 12:27 by Kelly in   //  Tags:   //   Comments (0)

Just a reminder that we are out and about next week. Quotemonster is now two years old and is now the number one place to go for pricing and research. We are thrilled with this response and are committed to continuing to be your first choice.

As part of this we are holding another round of road shows in Auckland, Wellington and Christchurch. Ideal for you to attend if you are new to Quotemonster or if you are an old hand but want to learn about what’s new.

Including:

  • New Research tools (Business, IP Claims, Insurer Selector, Funeral Plan and Head to Head)
  • Policy Document Library
  • New poster - Why You Need Insurance: The Financial Facts
  • New quote options and products
  • Tips and tricks
  • The latest news on more than a dozen price and product changes since you last joined us

As always these sessions will be jam-packed full of good ideas and something to take away with you.

Click on the links below to register:

Auckland - North 28 October 2014
Auckland - Central 28 October 2014
Wellington 30 October 2014
Lower Hutt 30 October 2014
Christchurch 31 October 2014

Income Protection to Age 70 Pricing Available

21. October 2014 08:15 by Kelly in   //  Tags: ,   //   Comments (0)

Quotemonster is now quoting the pricing for Income Protection to Age 70 benefit period for those providers who offer it. When quoting Income Protection insurance you can select it in the list under the 'Benefit Period' the drop down box.

Advisers No Dinosaur - Channel Complexity Here To Stay

20. October 2014 14:27 by Kelly in   //  Tags:   //   Comments (0)

One UK insurance sales business has created a storm by placing a "financial adviser" in an exhibit with dinosaurs. But they are wrong; it seems hard to argue that the role of advisers will shrink: rising complexity and legal requirements appear to be entrenching advisers, not eliminating them. 

Regular readers will know that I am a supporter of online services, and see direct sales as a valid way to buy many, many, products - but I am a committed supporter of advice and advisers. I am also closely involved in Quotemonster, where we say "It's no dinosaur."

I was asked about this recently by a journalist. I pointed out that although many people get their first insurance policy from a bank, virtually no financial advisers would sell a policy as limited as most direct plans are to a client. Clients will get a better policy in almost all situations from a financial adviser. The one they bought direct was okay, probably fit for purpose, and much better than nothing, but can usually be substantially improved on. Advisers do that. 

Also, around the world, advisers are being legislated into the financial lives of millions. Here in New Zealand only an AFA can provide personalised advice on KiwiSaver, for example, and is on record as saying it wants the involvement of advisers in complex financial decisions. 

Add to that the world of online comparison is coming under increasing regulatory scrutiny, and it looks like the distribution model for the future simply is not binary where one channel wins and another loses. The world is more complex. Different groups of clients will continue to want different services depending on their situation, ability to pay, and the regulatory structures applied to different kinds of products / advice processes. 

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