33 – Use Para-Planning and Tele-Underwriting Services

In the previous section, we talked about the adviser freeing up his or her time by having clients do as much of their own administration as possible.

Some advisers prefer not to ask their clients to do too much on their own behalf. For these advisers, an alternative is to engage a lower-paid member of staff to provide ‘para-planning’ services. Doing this frees up the adviser’s time to be spent on the higher value work of advising.

Para-planning services can even be extended to preparing the statement of advice for approval by the adviser.

Para-planners can be expensive though, and typically represent a relatively fixed cost. That is, most paraplanners are engaged on a salaried basis. This means they are a cost to the business even when they are not doing work that can be charged back to clients. It can also be difficult to scale up a paraplanner’s hours – and even more difficult to scale them back if things go quiet.

This introduces the concept of outsourcing paraplanning. Dover advisers are welcome to make use of our in-house para-planners, Simple Paraplanning. This services charges a fee for work done. It allows the combined size of the Dover group to work to your benefit. Dover employs para planners who can then work across many different practices.

Dover can also assist with things like the completion of insurance applications and SMSF administration.

In the life insurance field, similar use can be made of tele-underwriting services. In tele-underwriting, the insurer contacts the client directly and gathers the information for the insurance application over the phone. This can typically save up to an hour of the adviser’s time. There are also other benefits: any disclosure issues between the client and the insurer remain between them. The client and the insurer are establishing the contract independently of the adviser.

In addition, the insurer typically records the conversation, reducing the potential for a client to later turn around and argue that they told the adviser that they smoke three packs a day and drink like a fish, even thought their application listed them as non-smoking.  

Another benefit of tele-underwriting, that is often not considered, is that the client’s personal health details are not revealed to their adviser. Life insurance applications require information about sexual and other lifestyle practices, and obviously require detailed medical information. Many advisers prefer not to know these things about their clients. Many clients agree that they don’t want the adviser to know either. Using a tele-underwriter and maintaining the client’s privacy can help preserve the adviser-client relationship long after the insurance application has been submitted.

Most insurers offer tele-underwriting. You can read more about tele-underwriting in this article from RiskAdviser magazine.

The Dover Group