From what? The number of RFAs is genuinely hard to work out. The register is a mess 17,000 plus entries and rising. Because it is so simple (and relatively inexpensive) to register, lots of people do it. Most of these entries do not represent a person that gives advice. As quotemonster provides a useful free service to most RFAs that sell insurance we have a lot registered, but we have spent a lot of time weeding out 'dead' accounts, and we continue to see plenty of new registrations. Few will become successful advisers.
Do they all give advice? A significant number of people register as advisers and yet do not give advice. If you run a business which is, in fact, sales-only, there was still an advantage to register, as it reduced the risk and consequences should the person accidentally give advice. If RFA numbers fall that does not immediately mean that the number of advisers - meaning people actually giving advice - will fall.
How productive are they? It seems clear to us that most life insurance business is handled by the top 2,000 advisers, of which some 200 or so are AFAs. I expect the pattern to be little different for general insurance and home loans. A fall in the number of advisers does not equate to a fall in advice being given.
To what? Although the category 'RFA' will disappear, the people no longer in that category may appear in others. They may become FAs, or FARs, or they may sell but not give advice, as well as leaving the industry.
Of course, I am concerned that the new regime will result in a reduction in the number of advisers, and share that with Michael Dowling. The interesting thing about the likely reduction in RFAs participating will be the answers to the questions above. But the presence of the questions also tells us something about the current regime.
Susan Edmunds produced a summary of submissions article at this link. We did not make a formal submission, but took the opportunity to give our feedback directly to MBIE and the FMA outside the formal submission process. That's partly because we believe that a conversation was the best way to provide that submission, and partly because clients were making their own submissions and we provided input into theirs too.
Everyone's doing it. Apart from the insurance industry... On either side of politics, from comics to consumer companies, from Donald Trump to JK Rowling. People are using social media to engage with their audiences. Even our stodgy old political parties use social media extensively. Even more critically: they respond!
If I post a comment on a twitter stream about Air New Zealand, or Typepad, or Orlando Airport, they respond - usually within hours, often within minutes. I mention those three, because I have, and they did. Good on them all.
But the insurance industry, so wrapped up in itself, complaining about how regulators and ordinary folks don't understand, and yet - when consumers offer to engage on their terms, insurers are nowhere to be found. Take Susan Edmunds' recent article about non-disclosure. Look at the comments section and you'll see lots of this:
Insurers don't pay claims and don't want to
Insurers don't refund premium payments on avoided policies
Insurers don't ask clearly for the information that they want
Insurers don't take into account forgetfulness
Insurers don't take into account information already provided
Insurers don't take into account information they collect from your GP, they would rather hold onto it as a reason to deny a claim later
All of these are demonstrably false, wrong, or not fair on the insurance industry. Examples could be given, links provided to statistics, financial reports, and even videos of claimants posted (like the excellent Mind-the-gap series by the FSC). Why is the industry choosing to pass up this opportunity to engage with their audience? There are few exceptions: nib's CEO Rob Hennin has directly commented on LinkedIn posts, and in other media, Partners Life staff have directly commented on Goodreturns posts.
Goodreturns has the details of a case against an adviser brought by the FMA. Obviously this case has yet to be heard and we should not prejudge it. Having said that I was told by an insurer of their frustration in getting previous complaints which sounded similar to this one dealt with, and this suggests otherwise.