Results of FSC Financial Resilience Index, and more daily news

The FSC has released the latest Financial Resilience Index results. The latest results indicate that New Zealanders are still resilient and confident about financial matters. The index examined views on five indicators: financial confidence, literacy and preparedness, job security and wellbeing. 72% of participants reported that they feel reasonably, very or extremely confident in their financial standing.

“The latest round from the FSC’s Financial Resilience Index shows that despite the last six months being one of the most challenging periods in recent history, New Zealanders have remained remarkably resilient and confident when it comes to financial matters.

The Financial Resilience Index is a major tracking survey of New Zealanders’ views on five key financial resilience indicators: financial confidence, literacy and preparedness, job security and wellbeing.

“The responses in early August show that after initial uncertainty Kiwis remained resilient throughout this unprecedented period, from the introduction of Covid-19, to living in lockdown, right through to the return to alert level one,” says Richard Klipin, FSC chief executive.

“Despite these dramatic changes, New Zealanders continued to have incredible financial confidence, with around 72% of respondents still feeling reasonably, very or extremely confident when it came to their finances.”

The index found that although there is underlying anxiety, New Zealanders remain resilient. The FSC’s findings differs from the key findings of Cigna’s COVID-19 Global Impact Study, which highlighted that the majority of its 20,000 participants have a pessimistic view on their financial position.

In other news

Cigna: Cigna Parenting Survey 2020 found that 36% of parents surveyed had a will but no life insurance

FMA revealed that full licence provisions would be released mid-November  during FSC conference

Financial Advice: New board members announced at Financial Advice NZ


Financial Advice Trusted Adviser launches, and more daily news

Financial Advice has launched its Trusted Adviser mark although the public launch is scheduled for February 2021 to coincide with the new regime. The Trusted Adviser mark looks to recognise and award advisers that meet the set requirements.

“The Trusted Adviser mark is awarded to those Financial Advice NZ members who show they have committed to qualifications and continuing professional development obligations at a level higher than that required by New Zealand law and code.

The public launch of the mark is scheduled for February 2021 to coincide with the new financial advice regime coming into effect the following month. At that time when the AFA and RFA designations disappear, qualifying Financial Advice NZ members will have this new designation to show the public that their high level of qualification, experience and ethics has been recognised by a professional body.”

Those that meet the amended requirements can now apply to have the accreditation before the new regime.

“Applications are open now so qualifying advisers can have the Trusted Adviser mark ready before the March 15 2021 new regime.

After the feedback received during the consultation phase, some of the criteria has been amended in line with your views. Please review the application details as many members are not required to apply, only register, as we already know they meet the criteria. Click here to apply

In other news


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


AIA initiative to combat underinsurance, and more daily news

AIA has announced that eligible policies allow customers to pay it forward by gifting life insurance.  In a study commissioned by AIA, it was found that New Zealanders are underinsured and rank poorly when compared to other OECD countries as they often don’t want to think about death and the financial implications of dying on loved ones.

“New eligible AIA policies come with the option to gift life insurance to a loved one

New independent research commissioned by life, health and wellbeing insurer AIA New Zealand highlights some of the reasons why New Zealand ranks near the bottom of OECD countries  when it comes to insurance protection.

The research reveals more than a third of Kiwis don’t want to think about the idea of dying and haven’t considered the financial impact it would have on their family.

Two thirds of those surveyed said that they’d never had a conversation with family about life insurance when they were growing up and one third 4 said that they don’t understand the benefits of life insurance. More than half 5 have never tackled the topic of what would happen to their finances if they were unable to work due to death, serious illness, or injury.”

Nick Stanhope, AIA NZ CEO, said that New Zealanders need to plan for the future. To help encourage the discussion and planning process AIA has announced the introduction of the Share the Love initiative. The initiative will run from 28 September 2020 and 28 February 2021 and will allow customers to gift a six-month $50,000 policy for free.

Nick Stanhope, AIA New Zealand Chief Executive, says New Zealanders need to become more comfortable with planning for their future and with having conversations about financial protection.

“Our research shows that New Zealanders generally don’t like to think or talk about these difficult but necessary topics. When it comes to protecting our finances and wellbeing our lack of financial planning is leaving us behind most other OECD countries.”

“At AIA, we want to make it easier for New Zealanders to have a conversation about why life insurance is important. It’s why we’re encouraging all new eligible policy holders to Share the Love.”

AIA’s Share the Love is a first-of-its-kind initiative in New Zealand where new policy holders are encouraged to gift a free six-month $50,000 policy to a loved one." Click here to read more

In other news

Financial Advice: Bring in the Experts: Unlocking the Code in the New Financial Advice Regime - Part 2

Financial Advice: Special General Election Debate - 2020 Election Economic Debate

FSC: Get In Shape Webinar Series: Session 10 - Privacy - Reviewing your obligations under the Privacy Act


Legal and regulatory update for the life and health insurance sector

9 Sept 2020 – IRD issued guidance on the taxation of cryptoassets. https://www.ird.govt.nz/cryptoassets

10 Sept 2020 - Financial Advice New Zealand have created a Virtual Conference/ Regional Roadshow, with the conference hosted over four regions in a different region each day over 21-24 Sept, with the Auckland event being online. https://financialadvice.nz/conference-2020-home/

14 Sept 2020 - The Reserve Bank announced that it will be relaunching the review of the Insurance (Prudential Supervision) Act (IPSA) in October 2020. A policy paper outlining the resumption of the IPSA Review, and objectives and topics to be covered, will be published in early October. It will provide an updated overview explaining objectives, topics to be covered and an indicative timetable. At the same time, the RBNZ will release a consultation paper on principles to guide the review of Solvency Standards. https://www.rbnz.govt.nz/news/2020/09/work-on-insurance-act-review-resumes


Advisers warned against cyber-attacks, and more daily news

After the NZX cyber-attacks, financial service businesses are being warned by the National Cyber Security Centre (NCSC). The high cyber security advisory that was issued addresses the current threat and details how attacks could happen. The NCSC has said that businesses should review current plans and systems in place.

“A high cyber security advisory has been issued by the National Cyber Security Centre (NCSC), warning financial services businesses about the current threat and outlining how the attacks could occur.

Affected entities have received ransom emails demanding payment in Bitcoin, along with a threat of a significant distributed denial of service (DDoS) attack against internet-exposed infrastructure if the ransom is not paid.

The NCSC said financial services firms should review their plans for responding to a DDoS attack to ensure they were up to date, and review their systems architecture to identify any potential points of failure. ”

Katrina Shanks has said that advisers need to avoid being complacent and instead need to know the strength of their current cyber security processes. She continued by saying that cyber-attacks affect consumer confidence and that there are many options for those looking to improve their cyber security.

“Financial Advice NZ chief executive Katrina Shanks said advisers would need to understand how up to date their cyber security processes were and what protections they had in place. And should avoid “being complacent”.

She said there were a lot of options available to businesses that wanted to improve their cyber security. “You do get what you pay for.”

She said there was a risk to consumer confidence when high-profile financial services firms such as the NZX, were repeatedly felled by the attacks.” Click here to read more

In other news

Level five isn't the big issue for advisers; It's something else

FMA: FMA releases new investor guide to bonds

Deloitte: Tricky to compare NZ insurance to other markets - report prepared for Partners Life


Financial Advice conference recipient of Government funding, and more daily news

It was announced that MBIE’s $10 million Domestic Events Fund was set up to support events. Financial Advice NZ has been named as one of the 200 recipients.  The funding was granted to Financial Advice NZ for their 2020 Bounce conference.

“The $10 million Government fund was set up to support the events industry despite the disruption of Covid-19.

Financial Advice NZ received funding for its conference this year, which is set up as a series of roadshow events across the country. The events can be attended online or in-person. The association will decide this weekend whether to go ahead with an in-person Auckland event.”

Katrina Shanks has said that the funding is fantastic and would allow them to have certainty.

“Financial Advice NZ chief executive Katrina Shanks said the funding would allow the association to have some certainty as it worked with the events company delivering its conference this year.

“It’s fantastic for them. It’s yet another industry that’s had a huge hit from Covid.” Click here to read more

In other news:

AMP: AMP announced that it is considering selling all, or some, of its assets, various stories, but this one in the AFR is recent

Partners Life: Expressions of interest is now open for the September 2020 New Adviser Training Course

RBNZ: Same objectives, different challenges


Industry reacts to disclosure regulation draft, and more daily news

The submissions on disclosure regulations have been released by MBIE. Although the response was largely positive, some concerns were raised about the disclosure requirements set to come into place on 15 March 2021.
 
AMP highlighted the risk of repetition without addressing issues currently being undervalued by consumers. To ensure value is added AMP suggested that disclosures need to be simple and brief, something AMP doesn’t believe has been achieved by the current draft.

“AMP said there was a risk that the disclosure would end up being repetitive and not address the issue of long, impenetrable disclosures not currently being valued by consumers.

 

“For benefits to be delivered to New Zealand consumers it is essential for disclosures to be simple, meaningful, very brief and unobtrusive. We do not consider that these aims would be met with the regulations as drafted.”

 

Under the new rules, advisers are required to disclose any commissions or incentives they receive that a reasonable client might think might materially influence their advice.”

While Financial Advice said that a reasonable person wouldn’t have a good grasp of identifying conflicts of interest within the industry and that the regulation could be strengthened by having higher standards in place. Financial Advice highlighted that there are many references to ‘incentives’ so including a definition and reference to ‘disincentives’ would be valuable. 

“But Financial Advice NZ said a reasonable client would not expect to have a good grasp of identifying conflicts of interest in the sector.

 

“The regulation could be strengthened by having a higher standard, such as – ‘any interest of A, P, or any other person connected with the giving of the advice that has the potential to influence the advice given by A’.

 

“There are various references to ‘incentives’. We recommend including in the regulation a definition and reference to ‘disincentives’ as well. For example, a reduction of commission rates for low volumes could escape the disclosure regime. Disincentives is an area that is often overlooked and should be drawn attention to, so FAPs and advisers cannot avoid their disclosure obligations by saying ‘this disincentive is not technically an incentive’.”” 

AIA stated that there should be further clarification on was is “practicable” for advisers to include and highlighted that this would cause significant issues for financial advice providers. Although AIA doesn’t see this as an issue as they are prepared to invest in the appropriate systems to aid advisers. 

“AIA said there should be more detail on when it was considered “practicable” for advisers to include in their disclosure the amount of fees payable by a client connected to the advice recommendation.

 

“This is a significant issue for financial advice providers. For AIA NZ, significant system investments will be required to provide estimates. While AIA NZ anticipates making this investment, we are concerned that other providers may choose not to do so, and instead elect not to provide estimates on the basis that it is not practicable to do so. This is an undesirable outcome for consumers which we consider could be avoided by better articulating the circumstances when providers may elect not to provide estimates.” Click here to read more

In other news

FSC: Generations Conference will no longer take place

Kepa: Kepa Compliance Officer’s Course was held in partnership with Rosewill Consulting  

Fidelity Life: Fidelity Life were announced as finalists in Best ICT Team Culture category in the 2020 CIO Awards

Fidelity Life: new applications are encouraged to be done through e-App

Fidelity Life: options for alteration requests are:

·       emailing signed alteration requests to admin.services@fidelitylife.co.nz

·       email from the individual policy owner’s email address

·       Mailing to Customer Care, Fidelity Life, PO Box 37-275, Parnell, Auckland 1151


COVID-19 crisis lessons for risk planning, and more daily news

After the Alert Level was eased to Level 1, New Zealanders returned to life as normal but after months of normalcy we were all shocked to discover that there was a COVID-19 resurgence and Aucklanders found themselves in lockdown once again. Adviser Peter Leitch recently spoke of the importance of having insurance. Peter said the recent developments has worked to remind people of the very real chances of unexpected events occurring and the consequences the will follow if people don’t have protection in place. 

 

When discussing the recent events Peter highlighted that people are often aware of the best course of action after the fact. During Financial Advice’s Money Week, Peter highlighted the importance of consulting a professional adviser and encouraged the public to seek out information relating to different insurance types and the cover they offer as well as understanding the claims process. 

“Money Week 2020 wrapped up earlier this month, and at the same time, New Zealand experienced its second outbreak of COVID-19 in the community - something financial adviser and insurance expert Peter Leitch says has once again demonstrated the importance of having protection, and of making good financial decisions.

 

With Auckland back in Alert Level 3, Leitch says this fresh outbreak has reminded everyone that unexpected events can happen overnight, and have potentially significant consequences. Partnering with Financial Advice New Zealand for Money Week, he urged consumers to inform themselves about different types of insurance, what they protect against and the claims process, and he also emphasised the value of having an adviser guiding them along the way.

 

“Recent events have shown us that things can happen unexpectedly, and we’re hoping for the best with the developing situation here in New Zealand,” Leitch commented. “We’re always cleverer in hindsight, and we always wish we may have done something prior to an event occurring.”” Click here to read more

In other news:

Pinnacle Life: Pinnacle Life offering 30 second quotes to find the right cover

Financial Advice NZ: Dr Angus Hervey and Tane Hunter from Future Crunch have been announced as speakers at the Bounce Conference  

Buying insurance can be a reassuringly normal thing to achieve

 

 

 

 


nib financial growths amid COVID-19, and more daily news

nib New Zealand announced that the 12 months to June 30 2020 has been an overall successful year for the insurer. nib experienced a 10.2% growth in revenue to NZ$253.1 million while also prioritising their efforts to support members and the community through COVID-19 related relief and other initiatives. The underwriting results also increased 11.2% to a total of NZ$25.9 million.

“nib New Zealand today announced an improved operating performance for the 12 months to 30 June 2020 (FY20) lifting membership, revenue and earnings.

nib New Zealand premium revenue grew 10.2% to NZ$253.1 million while underwriting result was NZ$25.9 million, up 11.2%. The FY20 underwriting result includes a NZ$9.0 million COVID-19 deferred claims provision for an expected claims catch-up in healthcare treatment deferred during the peak of the COVID-19 that is expected to occur in FY21.

nib New Zealand Chief Executive Officer, Rob Hennin, said nib performed well in FY20, reporting good financial results alongside its strong focus on supporting members and the community throughout COVID-19.

“Helping our Kiwi members stay safe and healthy throughout the COVID-19 pandemic has been a priority, which is why we moved quickly to implement an extensive support package,” Mr Hennin said.”

As part of their member support initiative nib has provided COVID-19 financial hardship support to over 2,000 members, premium relief and suspension options to over 5,000 members, extended cover for COVID-19 related treatments, expanded GP and specialist consultations through telehealth, and extended treatment pre-approvals.

““To date, we’ve provided more than 2,000 Kiwis members with access to financial hardship support, including premium relief and suspension options, postponed premium increases for over 50,000 members and extended coverage for COVID-19 related treatment across all levels of hospital cover, at no extra cost.

In addition, we expanded cover for consultations with GPs and specialists through telehealth, ensuring members could continue to see their medical practitioner during severe lockdown restrictions. We also extended treatment pre-approval from three to six months, meaning over 1,000 members did not have to reapply for surgery approval if they experienced delays in accessing hospital treatment."

In partnership with nib foundation, nib has donated $1 million to Lifeline Aotearoa and Clearhead as part of their community support initiatives.

"Further, we made a $1 million donation, together with nib foundation, to Lifeline Aotearoa and Clearhead, helping support our communities and the ongoing mental health needs of New Zealanders,” he said." Click here to read more

In other news:

Nib: Episode 4 of nib’s webinar series is set to stream September 2 2020 at 11:30am 

AMP: AMP makes top-level changes amid allegations

Asteron Life: Asteron Life profit drops

RBNZ: RBNZ to lead Asia-Pacific Central Banks working group

Financial Advice: Economic update by Economist Tony Alexander