The COVID-19 outbreak is expected to further pressure the financial advice market, which is already dealing with existing challenges arising from the Hayne royal commission and changes to advice education requirements, according to Challenger.

The insurer flagged the warning in a third-quarter results statement, saying “layers of disruption” are expected for some time and that it is unclear at this stage how this would impact sales in the fourth quarter.

“There’s no doubt that the challenges financial advisers were already facing following the royal commission have been further exacerbated by the pandemic which has impacted their ability to onboard new clients and engage effectively with their existing customers,” CEO and MD Richard Howes said.

“In response we are carefully prioritising the work we do to address these issues and prepare for the future,” Mr Howes said

“We are continuing to pursue a range of initiatives to build our institutional relationships, enable direct reinvestments and support customers and advisers through this period.

“This will enable us to maximise our resilience through this disruption and ensure we are well positioned to drive growth as conditions improve.”

Total life sales in the third quarter improved 9% to $949 million from a year earlier, lifted in part by strong institutional growth. Life annuity sales declined 10% to $593 million as Australian annuity sales slumped 37% to $383 million.

Challenger has reaffirmed its forecast of $500-550 million in normalised net profit before tax for this financial year.