Regular readers will notice that I have not been blogging as often over the holiday as I usually do. Although I am staying in touch and keeping up to date I have been on holiday, properly, and I have been to some remote places. This is a snap from one of them, Blea Tarn, in Cumbria, where I was a few days ago.
RiskInfo has the details of three new appointments to Fidelity Life - link.
The following appointments to new roles have been announced, which it said is part of its new sales and support model for advisers:
- Phil O’Keefe – Key Development Manager Health
- Ciara Thompson and Anna Frecklington – Retail Account Managers
- Leigh Austin – Professional Development Manager
Fidelity Life Chief Distribution Officer, Adrian Riminton, says the new model will help set advisers up for success in 2019.
The FMA has kindly sent a pdf version of the report to which I referred last week. You can download it here: Download 2018 FMA Survey Consumer Experience of Providers' Conduct_FINAL PDF
Reflecting again on the areas where consumers disagreed with statements like 'the provider helped to understand why the product was appropriate' I was struck in this case how the number that disagreed was surprisingly low. Especially in contrast to previous work the FSC has done in the insurance sector where consumers that do not own insurance identified complexity as a major factor in their decision not to buy. I suspect that buyers may under-report their lack of understanding, and non-buyers may over-report it. Each answer effectively rationalising the decision that they have taken.
Looking at 2019 and planning to do things differently inevitably brings us face-to-face with the need to innovate. But innovation is a widely misunderstood concept. First, ideas are not equal to innovation. To innovate we must do more than think of a cool new way things could be done, the idea must also work. The whiteboard exercise means nothing until the new thinking delivers value. Second, innovation is rarely a lightbulb moment - it generally emerges from organised and disciplined search. If you have identified a need to innovate, and you are wondering how to start, you could do a lot worse than ponder the seven sources of innovation identified by Peter Drucker in his 1985 classic "Innovation and Entrepreneurship - practice and principles".
The Economist has this piece on the risk of global recession. New Zealand's economy has been and remains in pretty good shape - but a global slow-down would have far-reaching consequences for us. Without good management we could be susceptible too. Sooner or later, a recession will come. When they do, there are predictable impacts on financial advisers: investment advisers face panicky clients that want to jump just at the wrong time. For insurance advisers there are cancellations and increased claims.
The FMA's report on trust has got journalists writing in all sorts of different directions. The NZ Herald (in an article I quoted in this post) felt it pointed to a lack of trust. Rob Stock, writing at Stuff, on the other hand chose to use the lens of contrast with Australia to highlight the presence of trust. Both articles are based on the same data. How can this be? The problem is a lack of agreement on what trust actually is, and the fact the survey only assessed trust in institutions by people that hold the products. Looking at each issue in turn raises more interesting questions for those of us with a commercial interest in winning trust, retaining trust, and using it as the basis for a mutually beneficial relationship.
Not including people that do not hold financial products creates multiple gaps in the view provided by the research. The first is that we have no idea about whether the people that do not buy these products have a trust issue. A brief thought exercise could see us easily categorise people who have not bought a financial product into those that need to, and those that do not. Trust is irrelevant for those that do not need to buy. For those that have a need, but don't buy, we could then sort between those not capable of buying (because of limited means, or due to being ineligible) and those that are capable. We do not need to examine the issue of trust for those not capable. For those with a need and the capability who have not bought a product trust would be a fascinating issue to explore.
That leads us to consider the definition of trust. Reading the report I was aching to ask the researchers about the definition. More than that, I wanted to know from consumers whether the obstacle to purchasing financial products was the presence of distrust, or the absence of trust, or required trust above a certain level. Without that understanding it is hard to interpret the meaning of the measurements in the report. If the presence of trust is required in order to purchase, then the answers in the 'don't know' category, and the middle section of the five point scale must all count towards the non-trusting balance. If consumers are happy to buy in the absence of distrust, then they could be counted with the total for 'trusting'.
Furthermore, I doubt that trust functions the same for different types of products. This report includes life insurance with investments. As virtually all life insurance is rate-for-age term insurance the proposition is fundamentally different to most investments. Even with the investments categories, the question is asked at a very high level. The category "shares" includes very risky and much less risky propositions. It may be unclear who the financial service provider is in this context.
On balance, there is plenty more work to be done to understand the area of consumer trust. Getting to the point where a benchmark is sufficiently meaningful that it could be tracked year-on-year so that there is a reliable measurement for trust in financial service providers would be a big achievement, and worth spending the time and effort to achieve. It is not achieved the by the current report.
I have asked the FMA to provide a copy of the report by PDF which makes it easier to store, and mark-up, for future reference.
Happy New Year! I hope that you find 2019 is a great year to learn new skills, create and build your new projects, and to reap the rewards. While you are waking up to the first morning of 2019 I shall still be counting down to New Years' celebrations as I am currently in the UK with family. But wherever you are, my best wishes for you for 2019.