moneyblog

The Value offered by Dealer Groups

Prompted by the recent article on goodreturns I've been challenged to state my view on the value that dealer groups add for the override they are paid. It has been 20 years since I was employed by an insurance company, although in my current business I deal with many. But back when I left Sovereign's employment to launch Quicken.co.nz I had the view shared by many 'inside' insurers that dealer groups offered little value. Over the ensuring ten years my view was changed. Today I have the economist's viewpoint: as most insurance advisers know that the group is paid an override, and many could obtain that themselves (through one of several strategies) they must see value in the groups, otherwise they wouldn't be members. Then, to explore what that is, I just asked a few. Since then - for about the last ten years - I have seen that value demonstrated. The sources vary. From networking and collegiate exchange, adding more training services recently, through to a broad suite of technology services, most of the groups have been adding value in a battery of ways. Whether that can continue to allow that to be funded in the traditional manner will be up to MBIE as they draft the new Conduct of Financial Institutions law. 

ANZIIF Award finalists announced

The finalists for the ANZIIF New Zealand Insurance Industry Awards have been announced. The awards are being held on the 27th of November at the Cordis Hotel in Auckland. 

The finalists for the 2019 New Zealand Insurance Industry Awards are:

• Life Insurance Company of the Year - Asteron Life and Fidelity Life
• Innovation of the Year - AA Insurance, Cove, Cover-More Travel Insurance, and Initio
• Service Provider to the Insurance Industry - CoreLogic NZ, IVAA Jewellery Claims Management, JB Hi-Fi, Smith & Smith, and Verisk
• Large Broking Company of the Year - Insurance Advisernet New Zealand and Rothbury Insurance Brokers
• Underwriting Agency of the Year - Delta Insurance and Underwriting Agencies New Zealand 
• Direct General Insurance Company of the Year - AA Insurance, FMG, and Tower Insurance
• Professional Services Firm of the Year - Crawford and Company NZ, DLA Piper, Duncan Cotterill, Finity Consulting, RMS, Sedgwick New Zealand, and Wotton + Kearney
• Excellence in Workplace Diversity and Inclusion - DLA Piper, IAG NZ, Suncorp New Zealand, and Zurich New Zealand 

FMA proposal for standard conditions for transitional licences

It has been announced that the FMA is consulting on two standard conditions that they are considering to impose for transitional licences. The final date for submission forms will be Friday 26 July at 5 pm. Submissions should be sent to consultation@fma.govt.nz

Click here to read more

Demystify licensing - understanding what is required to be licensed as a financial advice provider

There’s a lot of talk around the licensing pathway, and it is getting more complicated than ever for advisers who would prefer to maintain in control of their advice practice.

Advisers will need to prepare their practice in advance of any licence application with all expected policies, processes, and controls in place. While also maintaining a governance system, financial controls and reporting, and ensuring that there are protocols and procedures in place.

We have identified and mapped out:

• At least eight things which will have to be done and in place if you wish to be allowed to continue practicing just as an adviser in the short term
• 15 more things you need to complete before the end of the Transitional Licensing period if you wish to stay in business as an adviser, although not necessarily with your own licence
• And 23 more things you are required to fulfill if you want to be able to successfully apply for your own licence and retain your independence as a business owner by the Transitional Licensing period.

Barry Read, Russell Hutchinson and Tony Vidler have put together a practical webinar in the key decision points and options for New Zealand financial advisers considering their licensing choices.

Through this webinar, you will be presented with neutral arguments. With no promotion of any models or providers. Instead, you will be provided with a genuine strategic approach that gives your adviser business probable options.

During the webinar, we will provide a comprehensive checklist of the various practice management, advice process, and regulatory issues which we expect will be required for full licensing.

The NZ Adviser' Licensing Decision Pathway Webinar

Date:         5 July 2019

Time:        10.30 a.m.

Cost:          $75 (+ GST)

Duration:   1 hour

Click here to register

Newpark update

Newpark has appointed Peter Lycett as General Manger, Performance and Growth. Lycett has been working as an AFA for the past eight years and has previous experience as a litigator.

Adviser Businesses: Opportunity is Among the Uncertainty and Change

Changing requirements for adviser businesses put pressure on everyone, but these changes could create winners and losers in the advice world in particular, as well as the wider insurance sector in general. Some advisers will identify opportunities while others will find the pressure overwhelms them – and so they will make a decision to leave.

I am concerned that rushed change, often poorly designed, could damage the market. That worry applies not just to legal and regulatory change – such as a Supplementary Order Paper running to well over 100 pages – but also to industry reaction to the new law. I am particularly worried about reducing the supply of advice to clients and pushing some out of the advice sector.

But you may also find great opportunity in change. Could that be you?

The advice business that is more likely to succeed will have one or more of the following characteristics:
• A strongly defined advice service with clear value to the customer
• Strength (or scale) in a particular territory
• Well-organised marketing processes, and some experience of marketing automation
• Compliance assurance processes that provide evidence to managers of good adherence to advice standards
• Good governance processes, with effective oversight of how advice is given, how insurance providers are selected, and how clients are served
• Access to capital
• Most of all: an optimistic frame of mind about the opportunities that may emerge
Of course, even the best advice businesses usually need to work on one or more of these, and most need to do some work in each area.

Transplanting investment-focused advice processes to an insurance or mortgage advice business can fail – because the importance of the emotional connection to the client, their need for cover, and knowledge of insurance products is lacking.

Forcing your advice into a process designed by a technology provider can fail too – because systems design isn’t the same as service design. The problems of failing to focus on the customer and their journey through the process of purchasing advice is often lacking.

Taking time to work on these areas of your business is vital, however, because:
• If you know you have strong advice processes, a good compliance assurance plan, and good governance, you will have nothing to fear from the new compliance regime
• If you have good systems, scale, and operational efficiency then you can cope better with any changes, and also look for growth opportunities
…and there will be opportunities to grow – if you understand your balance sheet and have access to capital, you may be surprised at the opportunities available over the coming years.

"Newpark’s commitment to supporting advisers’ success drew her to the role"

Melanie Purdey, former Medical Assurance Society Sales Manager, has been appointed as the new CXO of Newpark Financial Services. She begins her role as Chief Executive on April 2^nd. With 25 years industry experience here in New Zealand and Canada, Purdy was identified as the best person for the job. Her understanding of the new regulations and commitment to ensuring customer-centric business operations were factors that solidified her candidacy.

Her intention is to make Newpark the obvious choice for advisers, by making certain that their tools are top quality, current and compliant with the overall brand, culture and team that is not substitutable.

Click here to read more. 

New Zealander of the year described as having an inspiring presence at financial advice conferences

Mike King has an “inspiring presence at many financial adviser conferences.” Mike King was awarded the title of New Zealander of the year. He was one of 448 nominees, all who have contributed positively to New Zealand society. King has been awarded the award for the work that he has done around mental health awareness and other related substance abuse issues.

Alongside his rigorous work with breaking societal stigmas relating to mental health, King has invested his time in attending financial adviser conferences, where he has an inspiring presence. Click here to read more. In fact, he was a presence that helped us to be our better selves.

Ninth Message from FSC about future changes coming

Here you can find the ninth message from the FSC about the future changes coming to financial advice regulation. You can find the first eight messages here. 

MBIE released a consultation paper about licensing fees and levies in December and you have until the 22nd of February to give feedback. Submission details are available here. 

Advicemonster - We need your input

It was great to see more than 500 advisers in our recent roadshow to launch Advicemonster. We know that we are near the beginning of this journey and we have many suggestions for enhancements to the needs analysis and statement of advice documents. Added to that, with more information on the structure of the new regulatory environment and some great feedback from advisers groups we are looking to launch some key enhancements to the service which will be released in October. Then we have some further development decisions to be made. We need your help. To help us decide what features to add after the October update we would be very grateful if you can complete the survey. It can be anonymous (so you can be mean if you want) or you can include your details (so we can talk with you about your cool ideas). So please take a look at the survey