Mr Collins, a former adviser and now principal of consulting firm Risk Insurance Communication Skills, says “this approach appears to stem from an unnatural fear that communication skills are about selling and that selling is not professional”, he said.
“I do not believe that selling and professionalism are mutually exclusive and unless advisers improve their communication, relationship building and selling skills, our underinsurance problem will only worsen,” he said.
Mr Collins pointed out that while industry reform was “sorely needed”, it has not been effective in ensuring advisers can maintain a balance across developing both their technical understanding and communication skills while meeting their compliance obligations.
“It hasn’t been as successful as it could have been because in order to meet compliance obligations, many licensees have ignored the need for advisers to develop communication and relationship building skills,” he said.
“People buy advice first and product last and there is daylight in between. Advisers ignore at their peril the fact that while they may work in the financial services industry, they are in the people business.”
Mr Collins added that advisers who do not have great communication skills will struggle to meet their best interest duty obligations.
“The questions clients want answered when meeting with an adviser for the first time are, Do I like you? Do I trust you? Are you competent? Are you the sort of person who will put my best interests before your own? And it’s this last question where our industry falls down and that’s where advisers can be on the front foot,” he said.
“Knowing and understanding clients means advisers will be better placed to discover what clients really need in terms of life insurance and what they can afford,” he said.
Very well said Russell.