18 Jan 2021 – FMA released consultation on the Review of the Wholesale Investor Exclusion $750,000 Minimum Investment Exemption, with submissions closing on 26 Feb 2021. https://www.fma.govt.nz/compliance/consultation/consultation-paper-review-of-the-wholesale-investor-exclusion-750000-minimum-investment-exemption/
Diana Clement wrote a NZ Herald article on the need for being prepared in case of unexpected circumstances. Clement highlights that we need to be mentally prepared for the occurrence of personal or societal catastrophes. Clement continues by noting that getting out of debt and having savings is essential to overcome future crises. The need for budgets is highlighted by using the events surrounding COVID-19. Steve Morris, a financial adviser at SW Morris & Associates notes that we would all benefit from using digital tools such as free digital tools for personal cashflow forecasting such as PocketSmith. Insurance is highlighted as being another essential thing for New Zealanders to have in place to ensure protection. Income protection, mortgage protection, trauma/critical illness, permanent disability, business interruption, medical, and life insurance are all mentioned, with Clement saying each offers different types of cover that are useful in different circumstances. Although insurance is deemed as essential, Clement concludes by saying that no insurance policy is completely fool proof.
“My usual New Year articles are all about the positive stuff and how you can turn your year around. But after 2020, let's talk about preparedness. That includes being mentally prepared for curved balls, having savings, and taking out insurance.
Mental preparedness. Do you have a plan for the next time the world turns to custard? Unpredictable (black swan) events such as the Global Financial Crisis and now pandemic, hit us every 10 years or so. We can have personal black swan events such as divorce, or illness. Financial adviser Steve Morris of SW Morris & Associates has seen an upswing in couples separating after lockdown. This can be financially crippling. He recommends getting help from organisations such as The Parenting Place before the relationship ends up on the rocks.
Savings. Getting out of debt and building up some savings is essential if you want to ride out the next financial crisis. If you're constantly a few weeks from financial meltdown then this applies to you. It's hard, but you need to change your thinking and create a budget. People can and do turn their finances around. Use Covid-19 as the financial catalyst to get you started.
In an ideal world you need three to six months living costs (not income) squirrelled away. Providing you are still able to work and willing, most people will find a job within that period.
The best tool for this is a budget. I know it sounds boring, but it's simple to write your first budget and the outcome can be truly life-changing. I follow a number of investing and get out of debt forums and see ordinary Kiwis celebrating cutting up their last credit card or beginning an emergency fund. Don't write it off. It can happen.
Morris also recommends using the free digital tools for personal cashflow forecasting from PocketSmith.
Insurance. The whole point of insurance is to cover yourself financially when unexpected events hit. That's insurance cover for your health, income, and property.
A variety of insurances can cover your income/outgoings. They include income/mortgage protection, trauma/critical illness, permanent disability, business interruption, medical, and life insurance (which often pays out if you're diagnosed with a terminal illness. Each covers different risks and it's a good idea to seek advice from a financial adviser. Everyone is covered by ACC for accidents, but you're more likely to become disabled by illness, and only qualify for Work & Income benefits if you don't have insurance. When insuring yourself, make sure you think about the non-working or lower-earning partner, says Morris. All too often a higher-earning spouse has to reduce hours to pick up parenting duties if the other spouse becomes ill, is disabled, or dies, says Morris. Trauma cover is very good in this situation because it usually pays a lump sum, he says.
Insurance is essential in our modern world, but no insurance policy is 100 per cent foolproof. Because the things you will claim on are unexpected, they could fall outside the policy wording.” Click here to read more
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Although it might appear that journalists love to bash insurers, it is easy to forget that there is some surprisingly useful coverage:
Last year the high-profile owner, Gabrielle Mullins of the Auckland performance venue The Powerstation, died of cancer. She was fundraising to pay for Keytruda, a chemotherapy drug not yet funded by Pharmac. https://www.stuff.co.nz/entertainment/music/122701023/gabrielle-mullins-the-owner-of-aucklands-powerstation-venue-dies-of-cancer. Earlier this year Michael Kooge, a radio show host, also hit the headlines with his cancer story, saying "It's all pretty unlucky, if I had medical insurance when I was in my early 20s, before I got sick, I would be able to get this treatment covered, but because I didn't I'm being left to die.” At the same time Stuff linked to coverage by Tim Fairbrother of Rival Wealth discussing which type of medical insurance would be best. https://www.stuff.co.nz/business/81385630/what-type-of-medical-insurance-works-for-you-will-depend-on-your-circumstances
Each story is a tragedy. Also, the insurance industry could hardly hope for better promotional coverage. I draw your attention to what is implicit the first article and explicit in the second: that an unfunded drug would have helped, and that insurance would have funded this. In stories like these, it seems, the media believe in insurance. At other times, it appears that they ignore the vast volume of claims paid and believe that insurers are solely focused on denying the payment of claims. Is the glass actually half full?
Global vaccination progress is likely to be a key driver of recovery from the COVID-19 pandemic. Here is how that is going in selected OECD countries:
Partners Life has begun the process of becoming more transparent by publishing a timeline of key events that would be of interest to customers. This step comes after the announcement by Partners Life CEO Naomi Ballantyne and chairman Jim Minto in September. Partners Life has shared information that wasn’t previously made public by Partners Life or other New Zealand insurers. Partners Life says that it is happy to make this information public. Information shared include premium changes, claims ratios, awards and launches.
“In late September, you may have seen Naomi and our Chairman, Jim Minto, interviewed by the press talking about Partners Life’s plans to publish a whole bunch of information on our website in the name of transparency.
Since then, we have been working away, trying to figure out the best way to make this important information not only accessible, but readable and interesting to clients, advisers and regulators alike, and we are very pleased to let you know that we have today launched the ‘Timeline’ on our public website. The Timeline can be found here.
The Timeline narrates all of the customer-centric events that have occurred within Partners Life dating back to our launch, including yearly recaps of in-force business levels, claims paid vs. declined ratios, capital raised and financial strength history, every product related change since we launched in 2011 (both positive and restrictive), every premium rates change since 2011 along with other events which might of interest to a potential client (such as awards and new technology launches)
There is a huge amount of information contained within the Timeline, much of which has never been publicly made available by Life Insurers in the NZ market before – we are happy to make this information public, because we believe our performance over the last decade absolutely speaks for itself, and think that this information will be of great value to the general public, and to your clients in getting comfort around who Partners Life are, and what we believe in.”
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Partners Life: Partners Life to sponsor Partners Life DUAL. Adviser (100% off) discount is CTS21PLIFEADVISER and client discount (50% off) is CTS21PLIFEPOLICY
- Consultation on the proposed new distribution agreements
- Asteron Life product accreditation requirements
- Confirmation of FAP licensing arrangements
- Information to support in adviser complaints management processes
We have just distributed a new Medical Comparison database to all subscribers.
Changes in V84:
- Updated nib rates effective 1/1/21
- Update AIA policy fee effective 1/1/21
The Reserve Bank has announced that it will continue to respond to the external breach of an information sharing service. Adrian Orr has said that the RBNZ has contained the breach and is now working to understand the impact of the breach, this includes working with both domestic and international cyber security experts. It has been noted that the breach wasn’t an attack on RBNZ or other users of the information sharing service. RBNZ has said that it cannot offer more details at this time.
“The Reserve Bank of New Zealand – Te Pūtea Matua continues to respond with urgency to a breach of a third party file sharing service used to share information with external stakeholders.
Governor Adrian Orr says the breach is contained, but it will take time to determine the impact. The analysis of the potentially affected information is being done with pace and care.
“We are actively working with domestic and international cyber security experts and other relevant authorities as part of our investigation. This includes the GCSB’s National Cyber Security Centre which has been notified and is providing guidance and advice.”
“We have been advised by the third party provider that this wasn’t a specific attack on the Reserve Bank, and other users of the file sharing application were also compromised.”
“We recognise the public interest in this incident however we are not in a position to provide further details at this time.”
Providing any further details at this early stage could adversely affect the investigation and the steps being taken to mitigate the breach. The Reserve Bank will continue to work with affected stakeholders directly.” Click here to read more
In other news:
Partners Life: Braden McMahon announced as new participant in the Legacy Leavers video series
Fidelity Life: 9-month fixed term Senior Project Manager role advertised in December
Gen Re: Medical Underwriting Programme set to become digital from 1 March 2021
An adviser business has put up for sale a lead generation website. A lead generation website is offered for sale as the adviser running the site wishes to focus on their own region, not on serving clients nationally or running a referral business. This is a great opportunity for a national business with the skills to serve the self-employed market. Twenty leads a week are typical from the site. Handover support is offered so you can continue to get the best out of the opportunity. Contact me or my team for further information.
nib has said that members that receive financial advice are better off. In addition, nib CEO Rob Hennin noted that half of nib’s members join via financial advisers. Hennin credited nib’s view by highlighting the findings from an internal study which found that members with advisers have more financial certainty and more health benefits. Hennin used the findings of nib’s internal study and studies commissioned by the FSC to conclude that people who receive financial advice are better off, saying that people with financial advice experience an improvement to their overall health.
“Health insurer nib says it is “absolutely clear” that customers with insurance advisers end up better off, and says advisers have done an “extraordinary” job adapting to the challenges that have come with COVID-19, and multiple lockdowns.
According to nib New Zealand CEO Rob Hennin, approximately half of the insurer’s business currently comes through its adviser channel. He says its internal studies have been clear – customers with advisers have more financial certainty, and also see increased health benefits as a result.
“It’s absolutely clear from our research and the work the Financial Services Council has done that Kiwis who receive financial advice are better off,” Hennin told Insurance Business.
Hennin acknowledged the work advisers have done saying that their response to COVID-19 was extraordinary. Hennin mentioned the increased use of digital tools and other methods to reach and assist clients.
“Advisers have just pivoted and done an extraordinary job throughout COVID-19,” Hennin added.
“They’ve really embraced digital tools and they’ve gone out, consulted with their clients and done whatever they can to ensure they all have access to the care and protection that they need.”” Click here to read more
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