This section of the paper is constructed in order to have an idea about the process that has been used in order to collect the data and the experience that I have faced in completing the application in an effective manner. In order to collect the data from the client, the initial thing that I had to ensure was to create a rapport with the client so that the client feels comfortable with me in order to share all the information that is required in order to create a plan with the help of which the requirements of the client can be met. Once the information came that the client needed help with respect to recommendations in making investments in investments and insurance products with the help of which the needs of the client for the future can be met.
I had fixed a meeting with Mr. John Tyler, who is a 29 year old person who has been married to Mrs Stella Tyler for over 4 years and have a child. I had fixed the meeting in his house as he was comfortable planning at his place. We had a friendly conversation in the beginning where I had introduced myself so that he could have an idea about me. I tried to be liberal friendly so that the client would become free and it would be easier for both of us to interact in an effective manner.
Initially, I inquired him about certain general questions that are required to known in order to move ahead with the meeting. I asked him about his future goals and objectives and furthermore wanted to know what sort of investments he was looking to undertake. In this manner, a precise idea had to be known with the help of which I can understand the requirement of the client. I even asked him about his profession and the degree of risk he faces in his job. This has a significant role to play as the degree of risk in his working environment would determine the kind of insurances that would be ideal him (Muda 2017). I even asked him about his financial income as income and expenses of the client would play a fundamental role in determining the products that are affordable to the client.
Once I had an idea about the client with respect to his needs, income and future goals with respect to which the insurance and the investment products can be recommended to the client. By understanding the personal information of the client, I had an idea that the client was wanted to secure the future life of his family and wanted to ensure that future of his child will be secured and they would be able to provide him with proper education. The client is aware of the fact that unprecedented events may take place at any point of time in life and therefore wants to purchase various insurance products with the help of which the income level will remain stable and financial compensation for any sort of future accident can be received (Kuhnle 2017). In this manner, I explained all the kinds of products that are available for them and thereafter explained each one of them. Initially, I explained about life insurance products and what benefits they would provide in case of unprecedented death. In this case the sum insured would be received by his family and thereby a financial remuneration will be received. I even explained him about the income protection plan with the help of which the income of the client will be secured and the client would be able to receive a monthly compensation based on the amount he would insure. This is a productive insurance as this ensures the client that they would receive a certain amount on a monthly basis with the help of which their standard of living can be maintained.
The next insurance plan that I explained to the client was the critical illness plan in which a certain amount of money would be given on the basis of the sum insured in case of critical illness and even in case of any trauma (Kramer 2016). In such circumstances, there are chances that the one affected may not be able to maintain their normal lifestyle for a long time and hence their income process may get hampered. With the help of this product, the client will receive certain amount of compensation that would be able to meet the expenses till the time the client is unable to start their normal life.
The other product that has been explained to the client has been the temporary or permanent disability insurance. With the help of this insurance the client in case of any permanent or temporary disability would receive a financial compensation that would meet the income that he has been unable to attain.
After explaining all the products that can be purchased by the client, I started to explain to the client the products that will be ideal for them. As the client is young and have a small family, all the explained products will be ideal for them. Initially, I came to know the total amount the client is ready to invest on the insurance products.
Accordingly I created a plan with the help of which the total investment money was segregated on the basis of on which product what percentage of money will be invested. As per the needs of the client, as John is the sole income source of the family a large portion of the investment was recommended in life insurance followed by in total or temporary disablement product (Hieber, Korn and Scherer 2015). Income protection is even a key product and therefore a certain amount has been invested in the same. A small percentage of money was kept for critical illness as the chances of that is less as the client is young.
After the meeting was complete, I was satisfied with the fact that i was successful in explaining the clients all the products as per their needs in an effective manner. Furthermore, the benefits they would receive from the products were clearly explained to them. All the explanations were made in simple language and any queries of the client were clarified so that the client did not have any doubt about the product. I even explained clearly about the product disclosure statement and even mentioned about the products that he needed to submit in order to attain the services. The fees and the charges that will be levied were explained to them so that the client can have an idea about the entire expenses. The services they would on such payment were explained to them so that they can remain satisfied that we are there for assistance whenever required (Bruhn 2015). The only thing that did not go well was that initially I was a bit reluctant in opening up with the client and once the client became free I was able to bring back my form and deliver the service that I was asked to. In this manner, I was successful in completing a client meet and render the service that was asked from the client in order to resolve his queries with regards to investment.
All insurance companies want to know details regarding the present health and medical history of their clients. Firstly, the insurance company is always on the hook for huge sum of money upon the passing of the clients, which mandates their need of uncovering all details regarding current health or relevant information from health history (Stolper and Walter 2017). Secondly, it needs to be understood that all health details are not important to the underwriters. This is because the insurance company would look for the health conditions of the client, which could have impact on the life expectancy of the individual. These would include stuffs like cancer, diabetes, history of stroke and others (Barrientos and Hulme 2016).
The insurance company wants to know about the travel plans of the client to find out whether there is any risk in the lifestyle and habits of the concerned individual. Additional information is required regarding whether the client is engaged in hazardous activities despite the fact that this information has no connection with the information of the individual (Schmid 2015). The main reason that such information is needed is that if the client dies due to any accident, the insurance company is oblige to provide life insurance proceeds on the death of the individual (George 2018).
Moreover, it has been observed that the insurance needs personal identifying information so that it could access the medical records of the client. The reason is to eliminate the prospect of assimilation up one client with another who is having the same name as well date of birth. However, the chance of such occurrence is minimal under any scenario. On the other hand, mistakes could happen, owing to which death benefits could be provided to the wrong individual or such benefits are not provided at all to the correct party (Bachmann and Hens 2015). By combining all these aspects, it is necessary for any client to provide accurate information to the insurance company (Halan, Sane and Thomas 2014).
The client would have the opportunity to provide the instructions of the adviser in writing, by fax, by telephone or other means. However, in few instances, the adviser might need instructions in writing. For personal protection of the client, the following steps have to be followed:
In addition, the client would obtain a number of documents. Before the adviser provides the client with any personal insurance product advice, the former would gather information about the latter, his objectives, needs and financial situation. The statement of advice (SoA) would set out the advice and the basis on which the same is provided. Based on such information, the client could decide his act. The document would set out information regarding the remuneration of the client and personal adviser along with revealing any relationship estimated to affect him at the time of providing the advice. Moreover, the copies of each advice document would be retained on the file of the client and the person might a copy by contacting the adviser.
In addition, a product disclosure document (PDS) is another document, which the client would receive if a specific financial product is suggested by the adviser. More precisely, the client would be provided with a PDS issued on the part of the product issuer. This statement would include information regarding the risks, benefits and other product attributes, which would help the client in making informed decisions regarding the product purchase. I hope all the required process that needs to be followed in order to advice regarding insurance products have been explained and this would assist in taking effective decisions with regards to your products on which investments will be made.
Role of the Financial Ombudsman in financial planning:
The mission of the Financial Ombudsman is to meet a significant opportunity by providing dispute service related to independent resolution where the individuals could place their confidence and trust (Fos.org.au 2019). The most significant roles played by this body in financial planning include the following;
Answer to Question a:
After analysing the provided case, it has been identified that the applicant has asked for payment of her claim related to insurance protection based on emotional breakdown or depression. Disputes have been raised against the life insurer and a financial advisory firm regarding incomplete disclosure of her medical history. However, a FOS case manager has issued a joint recommendation for both disputes, in which it has been stated that the applicant has failed to disclose adequate information regarding her medical history (Fos.org.au 2019).
Answer to Question b:
The main reason that the financial service provider has denied the claim of the client is that the client has not been able to disclose her medical history properly. Moreover, no evidences could be found regarding low intelligence, social impairment and other issues of the applicant, as the latter was managing both work and study.
Answer to Question c:
The applicant believed that she should have been paid because according to the FSP guidelines, any anxiety disorder manifested a year or two back before insurance application needs additional investigation by FSP instead of automatic refusal of insurance (George 2018). Therefore, FSP has not provided the necessary evidences for not supporting the claim of the applicant.
Answer to Question d:
After taking into consideration all the above-stated aspects, FSP needs to conduct appropriate investigation of the claim made by the applicant (Asebedo and Seay 2015). This is because they have failed to adhere to certain guidelines, which should be considered for ensuring compliance with the insurance policy of the applicant. Moreover, FSP should not have avoided three years of the date of the policy, which has violated “Section 29 of the Insurance Contracts Act 1984”.
Reference List
Asebedo, S.D. and Seay, M.C., 2015. From functioning to flourishing: Applying positive psychology to financial planning. Journal of Financial Planning, 28(11), pp.50-58.
Bachmann, K. and Hens, T., 2015. Investment competence and advice seeking. Journal of Behavioral and Experimental Finance, 6, pp.27-41.
Barrientos, A. and Hulme, D. eds., 2016. Social protection for the poor and poorest: Concepts, policies and politics. Springer.
Bruhn, A.G., 2015. Personal and social impacts of significant financial loss. Australian Journal of Management, 40(3), pp.459-477.
Burke, J. and Hung, A.A., 2015. Financial advice markets: A cross-country comparison. Rand Corporation.
Fos.org.au., 2019. Financial Ombudsman Service. [online] Available at: https://www.fos.org.au/ [Accessed 30 Jan. 2019].
George, V., 2018. Social security: Beveridge and after. Routledge.
Halan, M., Sane, R. and Thomas, S., 2014. The case of the missing billions: estimating losses to customers due to mis-sold life insurance policies. Journal of Economic Policy Reform, 17(4), pp.285-302.
Hieber, P., Korn, R. and Scherer, M., 2015. Analyzing the effect of low interest rates on the surplus participation of life insurance policies with different annual interest rate guarantees. European Actuarial Journal, 5(1), pp.11-28.
Kramer, M.M., 2016. Financial literacy, confidence and financial advice seeking. Journal of Economic Behavior & Organization, 131, pp.198-217.
Kuhnle, S., 2017. The growth of social insurance programs in Scandinavia: outside influences and internal forces. In Development of Welfare States in Europe and America (pp. 125-150). Routledge.
Nguyen, L., Gallery, G. and Newton, C., 2016. The influence of financial risk tolerance on investment decision-making in a financial advice context. Australasian Accounting, Business and Finance Journal, 10(3), pp.3-22.
Rejda, G.E., 2015. Social insurance and economic security. Routledge.
Schmid, G., 2015. Sharing risks of labour market transitions: Towards a system of employment insurance. British Journal of Industrial Relations, 53(1), pp.70-93.
Stolper, O.A. and Walter, A., 2017. Financial literacy, financial advice, and financial behavior. Journal of Business Economics, 87(5), pp.581-643.
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