Insurance through General Advice

Making informed decisions, accepting informed advice

The difference between general advice vs personal advice, is the difference between insourcing, or outsourcing your decision-making process. Both are reasonable approaches to your financial affairs, and only you can decide which is best for your circumstances.

General advice

General advice sounds like something you get from a friend, however it’s far from it. Those delivering general advice must hold an Australian Financial Services Licence, and are governed by a series of rules and regulations to protect your interests.

The essence of general advice is that you’re presented with information regarding life insurance, for example, and then your adviser talks you through the pros and cons of the various options.

By the end, you’re better informed, and able to make your own decision about what kind of cover is right for you. At no point in time will they take your personal circumstances into consideration, and this should be made clear throughout.

Benefits of general advice: You actually get to learn the intricacies of the products much better, and being well informed in your own affairs is never a bad thing. It’s also a much easier process, a lot more accessible and affordable than personal advice.

Drawbacks of general advice: Because your circumstances are not taken into consideration, you do actually have to comprehend the products well enough to ensure you make the right decision. So if you’re unsure of anything, continue to ask questions, or perhaps investigate obtaining personal advice instead.

Personal advice

Personal advice is where a financial adviser takes the time to get to know your complete financial and personal situation, your stage in life and goals for the future. They take all of that into consideration, before presenting you with their recommendations.

This is often accompanied by forecasts, detailed analysis and cashflow documents that show the expected result of the suggested course of action.

Benefits of personal advice: You’re receiving the dedicated attention of a fully qualified financial adviser, who’s taking into consideration all of your financial affairs and personal circumstances, and delivering a well-informed recommendation on the right course of action for you. They’re also legally required to keep your best interests at heart.

Drawbacks of personal advice: Because of the amount of time it takes, and the amount of research and decision-making you’re outsourcing to a qualified financial adviser, the cost of this approach is prohibitive for many. Some consumers have also found the Statement of Advice document hard to understand and can sometimes be unsure what is right for them.

General advice vs personal advice

So what’s most appropriate for you? Depends on your situation. You could easily argue that personal advice is always better if you can afford it.

However, if your personal circumstances aren’t terribly complicated, and you’re prepared to learn something new – then you can save a significant amount of money, and time by seeking out general advice instead.

The product that you end up with is the same – whichever way you choose to go.

Talk to an adviser to find out more.

Find out how our general advice model that integrates a CRM system, business process and compliance solution can work for you.