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19 May 2013
Life advisers should be building strategic relationships with accountants to win more self-managed superannuation fund (SMSF) business.
Asteron EGM Jordan Hawke told insuranceNEWS.com.au accountants are the key driver to selling more life insurance to SMSF members.
“The key is to build a strategic relationship with accountants as they are the ones setting up and advising members of these funds,” he said.
“There are also the potential Future of Financial Advice reforms for accountants to come, so now is the time to seek out those relationships.”
According to the Australian Tax Office (ATO), the value of insurance policies in SMSFs last September was $197 million.
This compares to the earliest date from the ATO, 2004, when there was $328 million of policies held by SMSF members.
The ATO also includes general insurance policies that would be covering assets such as buildings, so the total life insurance sales are probably lower.
In the latest SMSF figures, there are 841,283 members and funds are growing. In the 2011 financial year, 32,875 new funds were set up and only 3221 were closed down.
Mr Hawke says Asteron’s new Life Complete product has features, such as linking life and trauma policies both inside and outside superannuation, that are attractive to SMSF members.
“All of the new Life Complete products can be used by SMSF members and we can now offer trauma cover inside super linked to a life policy,” he said.
“Advisers can structure our products to suit that member’s particular needs and that is creating more opportunities in the sector.”
One reason for the fall in insurance cover in SMSFs, insuranceNEWS.com.au understands, is which sales teams look after them.
Some insurers treat SMSF policies as retail while other see them as being more aligned with the group business that deals with cover within super funds.
In some cases the business has been ignored as SMSFs are seen as falling in neither camp.
Mr Hawke says Asteron treats SMSF policies as retail sales so there is no danger of internal disputes as to who should look after applications.
“We cannot ignore SMSF business as it is the fastest growing sector of superannuation,” he said.
“We need to look at what needs to be done to turn around sales in this sector and I think the key to success will be working with the accountants.”
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