PAA's board member Trevor Slater is holding a session 'Useful tools for connecting with your customer' on the 23rd of February. Click here for more details and to register.
Hat tip to Tony Vidler for picking up on this article which highlights eight reasons why you should blog. It is a good list, but I would add at least one more reason: it helps build the skill of communicating in writing. If you write every day for ten years, you will get better and better. You will find better subjects, read more, learn from your audience, and learn to write more clearly. Your writing will leave a long trail of searchable electronic breadcrumbs to your business. You may have fun as well.
It is Auckland Anniversary Day today. That's a way of explaining that I'm not at work. Anything urgent, please call my mobile.
David Whyte has a nicely provocative title for his article on goodreturns: "Client-first may be too big an ask for biggest players" - although I think the issue is as important for small advice businesses as it is for big ones. The article is long but well worth a read because the issue of advice versus no-advice is an important one. Highlights include his comments on the 'approved product list of one'.
Boundaries are critical in law. Does this law affect you or not? The answer should be clear to everyone - whether they are a financial adviser or not. Although in some respects, and I am surprised to find myself saying this, the article is not long enough.
More can be said on the definition of the boundary between sales and advice, and it is about more than just the 'biggest players' versus, presumably smaller, 'financial advisers'. Take this point:
"The NZ regulator chose to discard any suggestion that differences between selling and advising be enshrined in the review, in the mistaken belief that drawing such a distinction would favour one distribution model over another."
The distinction was certainly left out, but I am not sure that was the reason it was left out. Whether you agree with it or not - and my compliance adviser, and others in the industry have had some heated debates over the issue, I think that for those drafting the law at MBIE the decision was this: if you do not give financial advice, you are outside the regime. The distinction is that you cannot call yourself a financial adviser. They do not seek to prescribe what you can call yourself, but you aren't allowed to use the term financial adviser.
If you are a financial adviser, and you wish to switch from giving advice to providing an execution-only service, there are some concerns that switch - especially if it happens in the course of one meeting - may confuse the customer. They may wonder, am I still getting advice? Or they may not wonder at all - and simply assume that they are still getting advice. This is an issue which affects most financial advisers - nearly everyone, big business or sole trader, likes the ability to just make a sale, without advice, from time to time. In this case, process and labeling becomes more important. We are interested in exactly what guidance comes from the FMA on that point, but it is unlikely that we will see further detail in the draft law.
In some respects the new law will push further into the territory which is currently outside the oversight of the Financial Advisers Act. It is proposed that the FMA be granted the power to designate some activities as advice, which may be outside the regime right now. Refer to my previous post on that point for more detail.
Success doesn't just like company, or accrue it, it actually needs it. Very rarely are individuals successful on their own. Even so-called loners, such as authors, often list a dozen people in their books 'without whom this book would not have been possible'. It is very rare for a person to have all the skills necessary to build a successful business on their own. Most meaningful businesses involve many people, and many of them are strangers, that had to be sought out and convinced to join the venture.
As a person who would naturally rather work alone, I find that challenging (at this point I offer thanks to those people past and present who have been able to look past my prickly personality and work with me). If you are like that too then you might find that from time to time you have a great idea - but you can't execute it on your own, but you don't want to share it. That's a tough place to be. Try reading this, it might help.
To judge from quote numbers in packages most advisers choose to start an insurance package with life cover. That choice might be worth exploring in more detail later on - but for now, let's move on and think about what comes next.
The most common addition after life is trauma insurance. In the past trauma has been criticised because, being condition-based, it is possible for a person to suffer a disability and be unable to claim on their trauma. Those folks argue that income protection should be bought first, and trauma afterwards. But trauma advocates have much the same argument: they point out that you can be diagnosed with cancer and not qualify for income protection. Trauma provides options at that point which income protection doesn't.
In a perfect world you would buy both. But budgets are rarely like that.
In total, Trauma is currently quoted twice as frequently as Income Protection. So where it is a straight choice, Trauma is winning.
More interesting is that two thirds of IP (including repayment protection) is sold in combination with Trauma. So there is a significant proportion of cases where advisers are successfully selling both, but when the chips are down, trauma wins. This must mainly be about budget, and some of it is about presentation.
There have been a number of changes to staff at ANZ Wealth and OnePath Life including a new Managing Director - Wealth, Craig Mulholland has been appointed the position.
Roharn Smith is joining the team as an Auckland Regional Sales Manager and they are recruiting for an additional Regional Sales Manager for Wellington to assist with South Island regions.
Vincent Bourke was welcomed to the underwriting team and Shelley Rider is moving from New Business to a Key Relationship Consultant role alongside Vincent.
I am looking for information on the financial impact of non-disabling cancer diagnosis. At the moment I am plowing through research reports but it is quite difficult to find specifically the financial impact where the client remains able to earn a living. This is the early-stage of cancer diagnosis, particularly applicable to minor cancers such as skin cancer, early stage prostate cancer, where the procedures have a limited impact on the ability to work and are usually easily accomodated by sick leave. Even case studies or your own or friends experiences related by email would be helpful.
The Financial Services Council, in association with Workplace Savings and Women in Super, are hosting a Breakfast Leadership Series.
Partners Life announced today that Sam Knowles is stepping down as chair of their board and that Jim Minto is to take on the role. The media release with details is available at this link.