Finding the balance between marketing and compliance, and more daily news

With the regulatory changes set to be implemented in early 2021, Karty Mayne from Rosewill Consulting is warning advisers to take precautions with advertising as this is an area that causes issues with compliance. Karty has suggested that advisers pay attention to their online activity. David Greenslade, executive director of Strategi has echoed Karty’s point by saying that although advisers have room to be creative they must carefully review the material.

“Karty Mayne, compliance consultant at Rosewill Consulting says that marketing and adverts are the areas where advisers can often trip up when it comes to compliance, and so they should be taking extra care to review their online activity.

David Greenslade, executive director of Strategi Group says the new disclosure regime will allow advisers to get more “innovative” with how they convey information - but it will also mean that every piece of marketing material will need to be looked at, and potentially revised.”

Karty has suggested advisers can improve current practices by updating their websites and reviewing how social media platforms are used. Additionally, Karty has suggested advisers create a compliance procedure that is simple to follow. Chatswood offers a Digital Advice Strategy service as well as an Advice Process Management service that helps advisers achieve what Karty is suggesting. If you wish to find out more email your interest to Jerusalem.Hibru@chatswood.co.nz or Russell.Hutchinson@chatswood.co.nz

““It’s also a really good opportunity to have a look at modernising your website and how you communicate on social media, because the FMA will look at all of that,” she explained.

Karty Mayne says the easiest way to stay on top of compliance is to create a series of policies, and document their implementation as simply as possible. She noted that if not for COVID-19, we would all be operating within the new regime right now - and so she urges advisers to use this extra breathing space ‘wisely’ and not get left behind.” Click here to read more

In other news

BNZ: Darrin Bull has been appointed as Head of Product and Distribution at BNZ

Cigna: Cigna appoints chief risk officer

Quarters two and three will see clients at their “most demanding”

Climate change may soon render some beach houses uninsurable


Changes to dealer groups, and more daily news

With regulatory changes finalising, the industry is working to adjust. This has resulted in a number of changes being contemplated as well as being implemented. Dealer groups have had to reconsider may aspects of their business to ensure that they are prepared for the upcoming changes. One potential change is the acquisition of a group by another.

“In the past week rumours started swirling around the market that one of the bigger groups was about to takeover/merge/acquire one of the mid-size groups.”

The impending changes to the current law has meant changes to Newpark have had to be made. Newpark is expected to announce changes to their model towards the end of next month.

“Meanwhile, Newpark is regrouping its army, but how big it will be after Partners Life new FAPO model where override commission is paid to FAPs is unknown.

Good Returns understands that Newpark will be announcing its new model around August 23. If Covid-19 hadn't rolled its dice and pushed licensing back a year it's questionable if the group would still be on the board.”

Alongside making changes to align with new regulatory standards dealer group must work to ensure that they offer advisers attractive membership services.

“For advisers there is a growing imperative to ensure they find a group that fits with their own beliefs and business practices.

For dealer groups the pressure is coming on to deliver appropriate services to their members at the right price points.”  Click here to read more

In other news:

FSCL: Dispute service sees complaints rise by 40%

Southern Cross: Insurance companies among finalists for awards championing diversity

FANZ: Trusted Adviser mark attracts “strong and supportive” feedback

Commerce Commission: Commerce Commission release advising the Court of Appeal issued a ruling in the case regarding Harmoney’s lending model. In a judgment issued on 8 July the Court said that: Harmoney Limited is a creditor, its contracts are consumer credit contracts which are subject to the requirements of the CCCF Act, its platform fee is therefore a credit fee that is required by the CCCF Act to be reasonable. 


AMP sale gets the green light, and more daily news

After spending the past 18 months reviewing the sale proposal, the Reserve Bank announced that they have approved the sale of AMP Life to Resolution Life. Customers with existing policies with AMP Life will be unaffected by the transaction.

“The Reserve Bank has approved the proposed sale of AMP Life to Resolution Life, in a revised arrangement that is subject to a number of conditions imposed to protect policyholders.

The Reserve Bank has been reviewing the proposed transaction and consulting with the parties involved over the past 18 months to ensure the deal met our requirements, Deputy Governor and General Manager for Financial Stability Geoff Bascand says.”

For the sale to go ahead a Trust was established. This is to ensure objectives are met, industry dynamics are positive and that there is insolvency protection. Additionally, the Trust is set to ensure localisation. Capital and assets will be held in New Zealand and Resolution Life New Zealand (RLNZ) will be established.

“A bespoke trust model has been established that ensures supervisory objectives are better met, future industry dynamics are generally more positive, and there is additional protection in the event of insolvency - one of the key risk considerations that we have been seeking to mitigate,” Mr Bascand says.

The Trust is required to hold capital and assets in New Zealand that help provide long-term security for policyholder benefits or investments, where relevant. The Trust will be under the management and scrutiny of relevant officers in New Zealand, who have appropriate influence and authority in respect of the New Zealand operations, for the purpose of securing equity across all policyholders.

In addition, the model will see the establishment of a new, locally incorporated insurer Resolution Life New Zealand (RLNZ). The RLNZ board will have a majority of New Zealand resident, independent directors. RLNZ will act as Trustee to the Trust and will effectively manage the assets held in the Trust.”

In other news:

Kepa: Four Adviser Resource Centre Services were available to Kepa Members for free July – September

FSC Connect webinar - Customers, complaints and claims - what have we learnt from COVID-19?

FSC webinar: Compliance with Financial Advisers Act between now and March 31 2020

FSC webinar: Preparing contracts with authorised bodies, advisers, contractors and other staff or suppliers


UPDATED: Melanie Purdey shares top FAP related questions, and more stories

Melanie Purdey shared what she thought advisers should be asking to ensure that they make the right decision in regard to joining a FAP.  Melanie covered culture, controls, communication, capability, and conflict.

Advisers need to consider the culture of the FAP. To ensure that there is synergy between them and the FAP. Melanie suggests advisers look into the FAP’s leadership, integrity and commitment to customers.

“Does this FAP have the leadership and legacy of looking out for clients’ best interests and putting them in priority?

Have they modelled a culture committed to attracting advisers with integrity or have numbers been the main driver for recruitment? Have they demonstrated leadership in dealing with renegade advisers who have committed breaches in the past?”

Click here to read more

In other news:

Asteron Life: Underwriting and New Business teams moved into a regional-based structure

Fidelity Life: Premium increases for some Income Protection and Key Person Cover customers effective 1 August 2020

Fidelity Life: Premium increases for some new level trauma covers, including Trauma Multi effective 1 August 2020. The underlying rates for some personal IP covers will increase for benefit periods to age 65 to age 70.  For new business for level Trauma and IP the to age 65 term will become to age 70. This was first reported incorrectly by Chatswood as a change to ages of eligibility, our apologies for the confusion. 

Fidelity Life: Planned changes or removal for some sales discounts including Key Person Cover


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