Doing nothing can be good advice
Most advisers recommend most clients change their super or their insurances most of the time.
This is not always good advice.
Quite often your client’ super or insurances will be perfectly fine, even if they are not your perfect preference. There will be no need to change anything.
Your time with your client will be better spent identifying ways your client’s financial profile can be improved, and this can amount to “steady as she goes” ie continuing the existing course of action, perhaps with some minor fine tuning or calibrations.
Think about not recommending clients change their super and their insurances in the first few meetings. Instead concentrate on the low hanging fruit including ways to increase your client’s super contributions, reduce their debts, start or buy a business, increase their employment prospects, get their estate planning in order and all the other important parts of a well thought out and executed long term financial plan.
Your client is the person sitting in front of you, not the model on the PDS cover. No one is that perfect. In fact, your client is very imperfect and this means you have to compromise. The perfect pitch won’t work with a real client. You have to do better than that. You have to put yourself in your real client’s shoes and come up with a strategy that is truly in their best interests, and appropriate to them.
It takes more than a switch here and a switch there. It needs substance. It needs reality. It needs skill and understanding. It needs empathy and sympathy. It needs body language, intuition, presence and prescience. It needs experience and expertise. It has to take in the full range of a client’s interests and life cycle. It has to look over the horizon and it has to motivate. It needs time and trouble. You have to want to help. Really help.
Take risk insurances, as an example.
Your client does not have the infinite resources and hope needed for a fully insured result. Your client cannot afford it. She wants to take her kids away at Christmas, and she cannot spend her dollar twice. Recognise this and accommodate it. Strive for common ground. Compromise. Reduce the sum insured. Lengthen the waiting period. Tax-deduct the premium. Rebate some commission. Place the insurance in super. Take your fee from there too. Step the premium and agree the sum insured.
Make it affordable. Whatever it takes to get her insured.
Explain yourself. Record the compromise in your SOA. Under-insurance is real and it’s not the end of the world. It’s much better than no insurance. Your SOA is a record of your advice to your client. So record your advice to your client in clear concise and effective language, at least one paragraph, that she is under-insured and she knows it, understands it and accepts it.
Remember, if it’s not affordable for her it’s not appropriate to her.
(Love to see an institutionalized robot do all that!)
 ASIC comments on this phenomena at paragraph 196 of Report 413: “It was rare to find advisers who recommended clients hold an existing policy or marginally decrease the level of cover or suite of insurance, regardless of whether this advice would have been in the best interests of their clients. The stakes can be very high for the insured and all too often we saw advice that failed to consider these important issues or provide any strategic value to the client in making these decisions.”