Advisers are reluctant to charge fees to clients for life insurance advice and engage with them about value of advice because of their own mindset, an advice consultant says.

Financial advice training consultant Chris Unwin says advisers need to “dramatically improve their client engagement skills in order to create a quality experience for a client instead of just completing transactions and ticking compliance boxes”.

“A lot of the issues that advisers have with the concept of fee-based remuneration in the risk advice space is actually a problem of their own mindset,” Mr Unwin told insuranceNEWS.com.au.

“Any reasonable client is more than happy to actually pay a fee as long as they perceive that they’re getting value … and not that many advisers are creating a quality experience for their clients in the risk advice space.”

Mr Unwin says the decline in the number of policies being sold by advisers won’t change until advisers deepen their client engagement. A recent Roy Morgan survey found the proportion of policies bought through the broking and advice channel has dropped to 17% from 21.3% in three years.

He told insuranceNEWS.com.au it’s true that life insurance is more expensive when bought through advice channels, but the industry needs to own that and demonstrate to clients why their advice is valuable and therefore worth paying more for.

A recent MetLife report revealed more than 40% of advice customers think life insurance bought through an adviser is more expensive. It also found that consumers who wanted to pay an upfront fee instead of commissions were only willing to pay an average $1700 – far lower than the average cost to produce comprehensive insurance advice.

Mr Unwin says advisers are inclined to focus on dollar figures when recommending life insurance, which puts off clients, and should focus on what percentage of income would a client want to secure during their working life.

“Any client will always perceive the percentage figure as being lower than the dollar figure,” he said.

People argue that clients won’t pay a premium plus an adviser fee, but he says the situation is no different than seeing a doctor for a consultation, getting a prescription, and then buying the medicine at the chemist.