The notion that almost 80 per cent of existing financial advisers do not write risk insurances, choosing to refer this business to a risk specialist, adds obvious further incentive for the advice profession to re-focus on the benefits of not only serving the risk needs of more Australians, but in effect ‘cherry pick’ the relatively prime professional market in Australia.

High-earning professionals are typically time poor and would seek out like-minded professionals to efficiently resolve the challenges and complexities of managing and protecting their wealth and future wellbeing.

A younger generation of professionals face an additional layer of complexity and opportunity including a looming $3.5 trillion wealth transfer that they may need help managing and protecting.

PPS Mutual Professionals Choice life insurance products have been designed to cater to the needs of high-earning professionals, ensuring they're adequately protected against life's uncertainties. Therefore we understand the significant opportunities presented by the professional client market and are committed to supporting IFAs in tapping into this lucrative segment. The support we provide around Australia to successful risk advice practitioners and their firms underscores the following additional key benefits of targeting the professional client market:

1. Greater earning potential and enhanced revenue streams

Professional clients typically enjoy higher earning potential. The younger cohort, while earning a lower income in the short-term, will in time significantly increase their earning potential.

High-earning professionals generally value support on a range of financial services as a complement to their risk insurance plans. This presents significant opportunities to partner with investment-oriented advisers or accountancy professionals to help resolve the additional investment management, estate planning, tax planning and business succession planning needs.

This may present an opportunity for risk advisers to organically tap into new revenue streams by facilitating holistic financial services that cater to the specific needs of high-earning professionals.

2. Professional networks and referral opportunities

The professional market offers a diverse array of connections: professional associations, industry groups, and networking events. By engaging with these networks, advisers can open doors to new and sustainable referral opportunities.

High-earning professionals also tend to associate with those in similar income brackets. Satisfied professional clients are more likely to refer their peers, friends and family who may also be high earners seeking similar guidance from a trusted expert. This can result in a strong referral network and steady stream of qualified leads. By partnering with PPS Mutual, IFAs can enhance their credibility and access to high-quality leads within these networks, further solidifying their position as trusted advisers to high-earning professionals.

3. Long-term relationships

High-earning professionals seek more than just financial advice, they seek a trusted partner who can guide them throughout their careers and beyond into the next generation. These clients would pay a premium for specialised services that cater to their unique needs.

Advisers who discern and cater to the unique needs of professionals – whether established or emerging in their career journey – lay the groundwork for enduring relationships, leading to client retention, and recurring revenue streams. Offering them access to PPS Mutual products, which are designed for these unique needs, will help IFAs build those long-term relationships and provide the comprehensive support professionals look for.

4. Greater potential monetary impact of trauma and thus need for advice

Australians are among the longest-living populations globally, yet one of the most underinsured. KMPG, Statista and the FSC (Financial Services Council) estimate that there are about 14.3 million underinsured for trauma insurance and 3.4 million underinsured for income protection insurance.

This is especially sobering when considering that high-earning professionals suffer a greater financial impact for any given health trauma relative to the overall population, according to our recent 2023 Reducing the Trauma report.

There are three drivers of this, according to the report. First, high earning professionals will almost always be treated as private patients. The out-of-pocket costs for private patients can be anything from two to ten times higher than those having the same condition treated publicly. Second, high earning professionals experience a ‘postcode multiplier’, i.e., paying more for procedures performed in more affluent areas. Third, income lost through time off work is higher for professionals, meaning some absences can leave sufferers forgoing tens or even hundreds of thousands of dollars.

Cancer, a pervasive threat, looms large in the professional sphere. Our research shows that over 1 million Australians have battled cancer, with 40% of working age. The mean duration of initial time off work due to cancer is 30 weeks, resulting in potential income loss for professionals of $150,000 and over, in addition to any ongoing loss due to reduced capacity.

What does this mean for the professional market? Our 2023 State of Health and Wellbeing in Accounting Report, shows that cancer is the number-one concern among Australian accountants. The report reveals that 1 in 3 accountants anticipate the possibility of cancer in the next 10 years. This stark reality underscores the crucial need for comprehensive support and robust financial planning for professionals in Australia.

Advisers charting the course for risk-ready professionals

For the growing cohort of Australian professionals grappling with unique challenges, underinsurance, and mounting healthcare costs, financial planning and risk advice will be critical to bolster and protect their future.

Advisers today have a unique opportunity to position themselves as indispensable allies and trusted counsel to these professionals, providing the safety net they need.

For advisers considering ways to better reach and serve this market segment, Becoming an accredited adviser with PPS Mutual, the only life insurer with a dedicated focus on professionals, could be a valuable step. With a product range designed to meet their unique needs, and protect against the unique risks they face, we offer a targeted way for advisers to expand and elevate their practice.