FSC Session: Professional Advice - Get In Shape: The Next Bite of the Apple, supported by Chatswood Consulting

Day 2 of the conference kicked off with the Professional Advice - Get In Shape: The Next Bite of the Apple session. This session was sponsored by Chatswood and saw Richard Kliplin lead the current and relevant regulatory discussion with Sharon Corbett, John Botica, Angus Dale-Jones, and Derek Grantham. During the session viewers had the opportunity to hear from MBIE, the FMA and the Code Working Group. The insightful session revealed key licencing stats and offered commentary on CoFI and FSLAA. The session allowed viewers the opportunity to ask the regulator questions. It was great to see many viewers utlising the ask a question feature on offer. Questions included:

·       When will the FMA release the requirements for a financial advice provider full licence, and the final standard conditions?

·       Will the FMA do anything to smooth full licence applications across the 2 year period or deal with the rush towards the end of the period?

·       What are the expectations around serving existing clients (pre-FSLAA), and how are these expectations reflected in the duties in the law or the CODE?

·       There are two places in the transitional licence application where the user experience is unintuitive. What are the FMA doing to ensure that the user experience in full licence applications is intuitive, and applicants won’t get stuck unnecessarily?

 

FSC day 2 Oct 14 3FSC day 2 Oct 14 3

 


Legal and regulatory update for the life and health insurance sector

14 Oct 2020 – The Financial Advisers Disciplinary Committee website has again been amended such that the “Next Hearing” has been changed from 2 Nov 2020 to 19 Nov 2020, again with no further information provided other than details of the venue. https://fadc.govt.nz/upcoming-hearings/

14 Oct 2020 – Good Returns reported the launch of the Trusted Adviser mark by Financial Advice NZ, noting that the public launch of the mark is scheduled for February 2021. https://www.goodreturns.co.nz/article/976517649/trusted-adviser-mark-finally-launched.html


Cygnus Law guide to financial advice service disclosure

Cygnus Law published a guide for financial advisers on the impending disclosure requirements. The document provides an overview of the new requirements, it outlines the general information that is needed to be outlines and the specific disclosure requirements.

Cygnus Law is a law firm based in Auckland City and offers legal services relating to commercial dealings.  Key services include:

  • Practical help to support new and established financial service providers to meet regulatory requirements and commercial objectives
  • Support for businesses to establish and succeed through effective commercial agreements, transactions and compliance
  • Help to understand the law’s impact on your business and how the law can be used to achieve commercial solutions

The overview of an advice business’s disclosure requirements explores who is responsible for disclosing, the type of information that must be disclosed, when the information is required, the amount of information, commission disclosures, conflicts of interest, information updates, and other things to consider.

General information to be disclosed provides insight into the general matters relevant to each disclosure stage. While the specific disclosure information to be disclosed section provides an outline of specific information that is required to be disclosed at each stage.

 Download Cygnus Law Disclosure Guide


AIA introduces claims management service, and more daily news

AIA has announced the launch of AIA 360, a free claims management service that is on offer to eligible IP customers. AIA currently spends over $1.1 million annually to assist customers on disability claims and has 26 case managers assigned to 1,300 cases.  This averages to 45 cases for each case manager. Chief Customer Officer Sharon Botica has said AIA is able to improve processes and offer better support with AIA 360.

“The insurer is launching AIA 360, which is described as "a personalised end-to-end claims experience providing support, guidance and rehabilitation."

The programme will be available to eligible income protection claimants and is offered free of charge.

Currently the company spends more than $1.1 million a year helping people on disability claims. It has 26 case managers looking after 1,300 rehabilitation cases.  This is about 45 cases for each case manager.

"We keep these numbers low so we’re able to provide a good level of individualised and tailored care and support to each customer," AIA chief customer officer Sharon Botica says.

She says the programme will provide support and guidance throughout the claims journey.”

Advisers will be able to offer customers support during the digital claim process. Although the service is currently being offered to those making IP claims, AIA is looking to expand the service offering in the future.

“Botica says will the company is trying to digitalise many of its processes, DI claims management requires the personal human-to-human touch.

"People are in a very vulnerable position when they claim," she says.

Botica says advisers will be able to give clients comfort that if they have to make a DI claim, there is a full service to support them.

360 Care will give clients confidence at claim time, she says.

360 Care is an evolving claims experience that will be available to more claimants in the future.” Click here to read more

In other news

Cigna: David Haak appointed as new General Manager – Distribution

Professional IQ: Advisers find “unexpected benefits” from completing Level 5

Strategi: AML compliance update webinar

FMA: World Investor Week live Q&A webinar

FSC: Financial Services Council  Annual General Meeting 2020

Partners Life: transparency, trust & the right thing to do webinar


Asteron Life upfront commission enhancements, and more daily news

Asteron Life has announced that upfront commission rate will be 190% effective October 5 2020. The decision for this change has been credited to working towards sustainability by ensuring more New Zealanders can access independent financial advice. Asteron Life has announced that it is offering a temporary 10% Covid-19 support in addition to upfront commission changes, which means upfront commission will total to 200%. This additional support is set to be reviewed at the end of June 2021. A summary comparison is available for subscribers to the Quarterly Life and Health review and much more detail in the Quarterly Commission Comparison. These have just been published to subscribers. For subscription information please contact Kelly Pulham or Russell Hutchinson. 

In other news

Cigna: General Manager- Distribution role being advertised

Fidelity Life: Sharecare October Eat More Greens Diet Challenge launched

Fidelity Life: Sharecare October Stress Relief Challenge launched

Fidelity Life: information about Centr^, personalised daily digital health and fitness program by Chris Hemsworth can be found in Sharecare

Kiwibank: Senior Conduct Manager role being advertised

nib: Mental Resilience webinar


Legal and regulatory update for the life and health insurance sector

2 Oct 2020 – Government released the Request for Proposal documents to appoint the next set of KiwiSaver default providers. https://www.mbie.govt.nz/about/news/kiwisaver-default-provider-rfp-opens/

5 Oct 2020 – Department of Internal Affairs posted on its AML/CFT News and Information website information on some of the risks associated with compliance with election financing laws. https://www.dia.govt.nz/AML-CFT-Election-financing-laws

5 Oct 2020 – The Financial Advisers Disciplinary Committee website has again been amended such that the “Next Hearing” has been changed from 5 Oct 2020 to 2 Nov 2020, again with no further information provided. https://fadc.govt.nz/upcoming-hearings/


Fidelity Life set to halt upfront commission on CPI increases, and more daily news

Fidelity Life has announced that it will no longer offer advisers upfront commission on premium increases resulting from inflation rates. Fidelity Life is currently the only insurer offering this type of upfront commission. Acting CEO Adrian Riminton said that this change will be implemented in six months.

“"We've concluded that paying initial commission on CPI increases is out of step with changing expectations around good customers outcomes and we're the only insurer that pays it."

The change would take effect in six months' time.

If a clients' premiums were $1,000 and increased to $1,030 because of inflation, most insurers would pay renewal commission on the total new amount.”

Adrian Riminton continued by acknowledging that this change may cause issues for some advisers but said that the early notice is intended to allow for adjustments. Riminton announced that Fidelity Life will stop be paying upfront commission on CPI increases on former Tower policies that weren’t eligible for payment from next month. Fidelity Life  is set to announce more changes in the near future.

“"We acknowledge this change may have a financial impact on some advisers. That's why we are providing six months' notice to allow you as much time to adjust as possible."

Riminton said the insurer had also found that, since 2015, it had been paying initial commission on CPI increases for some former Tower policies that were not eligible for the payment.

"While we won't be looking to recoup this, we do need to correct our mistake. So from November 2020, we'll no longer pay you initial commission on CPI increases on these policies."

He said Fidelity Life would reveal more changes to its adviser proposition in the coming months.” Click here to read more

In other news

FMA KiwiSaver report: Contributions, fund-switching and fees

RBNZ: Reserve Bank relaunches Insurance Act review

nib: top five claims in August:


Amount

Details

 

1

$98,810

Spine Surgery

2

$78,780

Coronary Bypass Surgery

3

$77,530

Spine Surgery

4

$72,860

Aortic Valve Replacement

5

$72,850

Coronary Bypass Surgery


NZFSG and Kepa merge, and more daily news

It was announced that Kepa’s mortgage business will merge with NZFSG. The takeover will see Kepa members being integrated into the NZFSG-Loan Market dealer network. Members offering general insurance advice will remain in Kepa. Kepa advisers will have the option of moving to NZFSG's MyCRM system and Kepa employees will be transferring.

“The nation's biggest broker group, NZFSG has effectively completed a takeover deal. Kepa's mortgage business will become part of its larger rival, marking the latest phase in industry consolidation.

The two groups have been in talks for several months, TMM Online understands.

Kepa’s members will be integrated within the NZFSG-Loan Market dealer network. Kepa advisers will be given the option to move onto NZFSG's MyCRM system, while Kepa’s staff will transfer to the merged business.

Both Kepa and NZFSG have said the merge will assist in better navigating the new regime and would create a national dealer group with over 1,600 members.

“Both parties believe the additional scale will help under the new financial advisers' regulatory regime, which will place greater demands on groups acting as Financial Advice Providers for their members. 

In a statement, the two groups said the deal would create a national dealer business with more than 1,600 members, settling more than $17 billion of mortgages and issuing $30 million of life insurance premiums each year.”

Congratulations to NZFSG-Loan Market and Kepa, on the successful conclusion of this deal. These take an enormous amount of work sustained over a considerable period of time. We wish them all the best in working through the coming year - which is shaping up to be a very busy one for everyone involved in the provision of financial advice due to the implementation of the new regime. 

Click here to read more

In other news

TikTok controversy ushers in new age of cyber threats


FSC Generations: Professional Advice - Get In Shape: The Next Bite of the Apple, supported by Chatswood Consulting

Chatswood Consulting is pleased to support the FSC's Generations conference and the professional advice session in particular. In a time of great transition, why not meet with the decision makers of the regulatory change?

This year’s panelists

  • Sharon Corbett, Manager Financial Markets, MBIE

Sharon manages the financial markets policy team at MBIE. She has been leading the Ministry's team amending New Zealand's financial advice legislation since the review commenced in 2014

  • John Botica, Director of Market Engagement, FMA

John Botica is the Director of Market Engagement at Financial Markets Authority. John is an experienced senior executive, director and consultant in the financial services industry. He was co-founder of the Assure NZ Group, Managing Director at Guardian Trust and General Manager Wealth Management at AXA

  • Angus Dale-Jones, Chair, Code Working Group

Angus is the Chair of the Code Working Group and is a chartered accountant and former financial services regulator in Australia and NZ. Angus runs a conduct, compliance and regulatory strategy consultancy

  • Derek Grantham, Principal Consultant, FMA

Derek works directly with the Director of Market Engagement, and has successfully represented the FMA at numerous industry events, often as a speaker or panelist. This has helped build effective relationships between the regulator and market participants and presented the FMA as a modern and approachable regulator. He is passionate about engaging with the financial sector to ensure that New Zealand financial markets remain transparent and fair.

Why you would attend

In this time of change, some may feel overwhelmed, some may be looking for further insight and guidance while others may want reassurance that they have made the best possible choice for their adviser business.

The FMA recently reported that over seven thousand advisers are associated with transitional licenses and that two thousand advisers are yet to apply.  Hear directly from Director of Market Engagement, John Botica and Principal Consultant Derek Grantham from the FMA on all that you need to know about transitional licenses. Sharon Corbett, Manager Financial Markets at MBIE and Angus Dale-Jones, Code Working Group Chair, will be part of the panel to share their insights.

The line-up of panelists provides any advice professional the opportunity to gain a better understanding of different aspects relating to transitional licenses.

Benefits of attending

  1. Hear directly from the regulator
  2. Independent industry expert insights
  3. Your licensing questions answered

How to attend

Find out more about the programme and how to register at this link.

Learn more about structuring your adviser business for the new regime

If you want an unbiased view on the right next steps from a structuring point of view, do contact us, we are happy to engage with your preferred compliance consultants to bring an industry and environmental context to your decision, or recommend either of our preferred consultants to help you make that choice. 


Fidelity Life licensing questionnaire, and more daily news

Fidelity Life are asking all advisers who have agencies with them to complete a licensing questionnaire. The questionnaire will allow Fidelity Life to understand what an adviser’s agency structure will be in the new regime, this will allow the insurer to continue accepting new business and paying commission. The questionnaire will be emailed out to advisers shortly and must be completed by 14 November 2020.

“So we can keep accepting your new business and paying you commission under the new adviser licensing regime, we need to know what your agency structure is going to be from 15 March 2021.

To make it easy for you we’ve developed a questionnaire. We’ll be emailing these out shortly so keep an eye out for yours.

So we have time to reflect these changes in our systems please respond by 14 November 2020.”

In other news

Fidelity Life: Building Better Businesses Live training to be held 18 September 2020

Fidelity Life: Disclosure Live: understanding the new disclosure requirements training to be held 22 September 2020

Fidelity Life: Part 1 of the online product accreditation programme, Learning HQ, is available now 

Fidelity Life: Part 2 of the online product accreditation programme, will be available in October 2020