moneyblog

Comparing the air quality of cities

Click here to see how the air quality of city you live in compares the most polluted cities in the world. This comparison does not take into account Australia's recent catastrophic bush fires. It is likely that air quality will become an increasingly important issue. It is becoming a political issue in China and India, and I suppose, given recent opinion polls, in Australia too. From a risk management perspective it is a huge concern increasing lung cancer incidence and risk - to name just one example. 

Partners Life: New Adviser Training Course

Partners Life have announced their next New Adviser Training Course in Auckland. It is to be held from the 7th to the 19th of February above their offices in Takapuna. The course is recommended for advisers who have been in the industry less than 24 months.

Click here to register.

Asteron Life gets new executive manager for corporate affairs

Marie Hosking has been appointed as Surcorp NZ's new executive manager for corporate affairs which will also look after Vero and Asteron Life. As mentioned in this article Marie comes from Mercury Energy and 'has extensive reputation, crisis management, and journalism experience'

 

When valuation of client base or whole business is useful

We offer a basic client base valuation, and a more complex business valuation service in conjunction with a chartered accountancy practice, where we supply the specialist industry knowledge. A valuation is useful if you are looking to:

• Sell
• Buying out
• Succession planning
• Borrow from the bank
• Transfer shares into a trust

Or if you are going through:

• Shareholder/partnership disputes
• Divorce/separations

Kōura looking to improve its digital advice platform - the struggle is conversion

Rupert Carlyon, Kōura founder has said since going live, they have given advice to 3,000 people through the company’s digital advice platform. They are looking to roll out new messaging to improve user experience and understanding of their products. Click here to read more

The internet is a great platform for data-rich financial services. Since its earliest days financial services (led by sharetrading) have been a leader in e-commerce. But there is a catch. It has always been difficult to convert a lot of interest into action. We can easily deliver data, calculators, and content - and still struggle to achieve connection, engagement, and action. This is the overarching problem with digital. It is worth working on, but it is hard. 

Goodreturns article wrong to be pessimistic on COFI-driven change

Goodreturns has a piece by-lined BusinessDesk which is pessimistic about the outcomes for introducing the Conduct of Financial Institutions reforms. I found the attitude of the article intensely disappointing. Not because there aren't problems, when there plainly are problems. Not for the numbers that were right, or the numbers that were wrong - some are hard facts and some are conjecture, and we are all entitled to share a point of view. Not for the failure to be even handed, although it wasn't: the author is particularly critical of advisers, but the Hayne commission tended to find the biggest problems in direct and vertically integrated channels. 

The main reason I am particularly disappointed is that it fails the standard the industry is being held to: it fails to address what a good customer outcome really is, and consider what the right pathway is to that. Instead it focuses on a few proxy numbers. Minister Faafoi does better because they have a vision of increasing confidence and clarity for consumers. MBIE does better because they consider efficiency as a whole and suitability throughout the product life-cycle as important factors. The industry does better because, contrary to the assertion in the article, they do look at more numbers than just new business. Lots of advisers, managers, owners, and leaders care a great deal about customer outcomes. Only one was quoted, but I could quote hundreds more. There are many differing views among them, interesting views that are actually shaping the future. 

There are progressive parts of the sector that embrace change, and there are others that prefer a risk avoidance strategy. A customer-focused view of industry problems needs to consider the fundamental challenges of writing complex business with a multi-decade time-frame. Those include: complexity, information asymmetry, data availability, equity between customers, and customer engagement. 

Contrary to the viewpoint in the article I think COFI has had a substantial effect already. An enormous amount of work by industry groups has been done to try and understand, guide, and change what goes on inside businesses, channels, and the conversations with customers however they engage, to address the real difficulties listed above - much of it has been work in progress and pre-dates COFI and the conduct review, such as the FSC Code of practice. I track every product change, every pricing change, at least a dozen products that had been unchanged for years have been updated and pricing revised. At least one product line has essentially been abandoned by the industry as a whole.  That might be good - but being un-replaced there is a lot of unmet insurance need. Other changes are not solely conduct driven, but are related, like the acquisitions of bank insurers by specialists and the opening of new channels. There has been more change in the industry in 2019 than anyone thought possible in, say, 2017. 2020 looks like being even busier. Contrary to the pessimism displayed by the BusinessDesk piece few pieces of law or regulatory change can claim such success.

Valentine’s Day breakfast with Geoff Bascand

FINSIA NZ will be holding an event alongside with Geoff Bascand, Deputy Governor and Head of Operations at RBNZ.

Date: 14 February

Time: 7am – 9am

Venue: New Lynn RSA

Cost: $25

To RSVP email your interest to the FINSIA Events email.

American medical services prices vs global prices

The International Federation of Health Plans published their latest report on the 2017 prices of international medical services. The report illustrated that both patients and insurance companies in the US paid higher prices in comparison to other countries sampled in the report. The 2018 study by Harvard on the things differentiate health systems found that the US is distinct in a number of ways.

Click here to read more

The US is a very high-cost economy and there are dangers of comparing goods that cannot be traded across borders. A good example to remember is that your don't mind paying perhaps fifty times as much as someone in rural China for a haircut, because everything here is pricier. But service costs are becoming increasingly comparable and can be subject to substitution: some people can get their hip replacements done in Thailand, for example. 

Lifetime wealth and insurance

So many New Zealander's feel that they may never have enough lifetime wealth (see this article by Rob Stock at stuff.co.nz). To focus on the positive: at least they are thinking about a good question. How much money is required to life out the rest of one's days is the number that underpins most strategic financial planning. It's the node which links planning for life and disability insurance to planning for retirement.

Most people in the financial services industry have several ideas about this number: a kind of rough rule of thumb, some assumptions about what should or should not be included, and then a much more detailed number they have worked out in their own case - and therefore a clear idea on how to do so. Most other people, unless they are working with a good financial adviser, haven't got that far. Just trying to work out the number generates the right kind of context to work on all sorts of financial planning questions, which is one of the reasons this question is such a good one to address.

For those of us with a strong interest in life and health insurance, it is interesting because that figure for lifetime wealth is essentially the amount of money required in order to never need to earn an income again. That's a circumstance broadly equivalent to total and permanent disablement. It is also a guide to the level of wealth at which insurance may no longer be required - although it may still be desired, in order to protect that wealth.

Of course, it is slightly more complicated in many risk planning situations. Costs can be higher in the case of disablement compared to retirement, but the time horizon may be shorter - as those with chronic health conditions affecting their ability to work have lower life expectancy. In the case of the death of a family member future financial requirements are affected by both the loss of income and the loss of expenditure by the deceased. Variations abound. When financial planners talk about their approach to calculating this number I like to hear the details of how they calculate the amount, and intrigued to hear if they consider age-adjusted life expectancy in the process. If you are interested in further discussion on this do let me know, I have a number of resources available to share. 

Charity Hospitals are growing to meet the demand for elective treatment

As Kiwi's needing non-urgent surgery are being turned away from public hospitals due to long wait lists, charity hospitals are becoming an option for many.

Click here to read more.