FMA offer insights into new regime progress, and more daily news

During a Financial Advice NZ webinar FMA director of market engagement John Botica concluded that the industry responded well to the regime change. Botica highlighted that over 3,000 financial advice providers, 10,000 advisers, and 12,000 nominated representatives are now on board. It was highlighted that there is now a steady flow of full licences applications. Botica made a note to discuss the lack of linking between advisers and FAPs on the FSPR. HE warned that it is important to link as there is the possibility of being deregistered from the FSPR from July. The assumption that the obligations of FSLAA don’t apply to the two-year transitional licence period was debunked,  it was made clear that all obligations of the new regime have been effective since March 15, 2021. Adviser website not reflecting the new disclosure rules was another issue discussed during the webinar. We offer a website review service for advisers looking to ensure they are compliant and have websites that are user-friendly. 

“Just over a month on from the start of the new regime, the FMA has shared a report card on how the financial services industry has adapted to the changes brought about by FSLAA.

Speaking at the Financial Advice New Zealand “Bring in the Experts” webinar, FMA director of market engagement, John Botica, said “The numbers tell us that [the industry] responded well.

“To see over 3,000 financial advice providers, together with 10,000 advisers and 12,000 nominated representatives tells us that the industry stepped up to the mark.”

According to Botica other factors on the positive side of the report card are that traffic of advisers applying for their full licence is starting to pick up.

“We are starting to get a good flow of full licence applications, and we are starting to see those licence approvals [coming] through which is great to see.”

But the report card was far from straight A’s.

On the negative side, Botica noted that many could be better at linking the advisers to the FAP on the FSPR.

“It is really important not to forget to do this. You really don’t want to get to the end of June and be facing the very real possibility of being deregistered from the FSPR.”

Another concern of the FMA is the misconception that the two year transitional licence period is a timeframe where the obligations of FSLAA do not apply.

Botica says, “This is just wrong. All obligations under the new regime took place on March 15. The transition period is in respect to moving to a full licence and to your approach to competency.”

The other low grade on the report card is related to adviser websites not being updated to reflect the new disclosure rules.

“Where we see genuine mistakes we will be sympathetic.” Click here to read more

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Southern Cross on future of the health sector, and more daily news

Southern Cross has described the change to the public health system as a positive step towards a more aligned health care system. Southern Cross noted that although the private health sector is highly efficient at delivering elective care, the sector needs to now work together to improve the overall service New Zealanders receive from public, private, and non-governmental providers. Southern Cross has highlighted that services must adapt to meet the demands of New Zealanders. Prioritising prevention has also been identified as key to achieving the best health outcomes.

“As the largest independent healthcare delivery network in the country, Southern Cross Healthcare welcomes the reform to the public health system.

It’s a positive step towards a more aligned system comprising public, private and non-governmental providers to achieve a better, fairer and more sustainable health solution.

The private health sector has a lot to offer and is well-recognised for highly efficient delivery of elective care. Now is the time to work in a whole of sector approach to maximise the contribution all facets of the health sector towards meeting the health needs of Kiwis.

The provision of services must adapt to meet ever-increasing and evolving demand. We only need to look at the growing mental health crisis, coupled with an ageing population where people’s latter years are often lived in a state of high health need, to see a strongly collaborative approach is required to deliver more efficient and cost-effective healthcare.

New Zealand simply cannot afford to have a health system that continues to operate at the bottom of the cliff. Changes need to happen now, and prevention must be a key focus for the new strategy to achieve the best health outcomes. 

This is why Southern Cross Healthcare has evolved beyond delivering care to patients in our wholly owned or joint venture hospitals and medical facilities and is investing in areas of growing importance. We now have invested in providing preventative, community-based services including occupational health, rehabilitation and mental health support, along with clinical wellness services.

While we know this is just the beginning, we look forward to receiving more information, and continuing to work in partnership to roll out the new health system.”

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nib on Pharmac review, and more daily news

Dr. Graeme Jarvis has written a piece on Stuff about the Government’s plan to conduct a review into Pharmac. In the piece, Dr. Jarvis notes that the review should be seen as being for the good of the country, as long as the review is intended to update an outdated system, improve Pharmac’s performance, and expand access to publicly funded medicines. Transparency, timeliness and equity have been described as being the focus of the review. 

“That this Government has decided to have a review into Pharmac should be seen as positive by the country, and good public sector governance. This assumes, of course, that the review truly aims to look at ways to modernise a 27-year-old system and both to improve the way New Zealand accesses publicly funded modern medicines and to enhance the agency’s performance.

Performance for any health service should not be about PR, such as modelled graphs reporting assumed, rather than actual, savings. It should be about health outcomes achieved. Hopefully, the review can lead to the generation of meaningful health outcome measurements for patients, not myth-based savings indicators.

Transparency, timeliness and equity seem to be key areas of focus in the review. Safety of medicines is not – that is rightly a statutory role for Medsafe, not Pharmac. However, given recent deaths following an enforced brand switch of an epilepsy drug, now subject to a coronial investigation, the safety of Pharmac’s cost-driven decision-making processes should be within scope.

Timeliness of decision-making is an issue. New Zealand takes 2.5 times as long as the OECD average of nine months to publicly fund modern medicines, all of which have undergone rigorous review internationally, including assessment of clinical need and effectiveness. Why the delay? Hopefully the review will answer this question.

Despite New Zealand’s comparable wealth on a GDP per capita basis, it funds between two and 10 times fewer modern medicines than our OECD peers. Why the disparity? Is it technical or fiscal rationing? Only the former is considered in-scope for the review.” Click here to read more

nib has noted that New Zealanders can take Pharmac out of the equation by signing up to Ultimate Health with Easy Overlay promotion. The campaign begun April 1 and will continue until 30 June 2021. The promotion is only being offered on nibAPPLY.

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Partners Life Customer Outcome Matrix update, and more daily news

Partners Life has provided more information on the upcoming Customer Outcome Matrix reporting and commission changes. Current bonus rates will remain in place until 30 September 2021 to ensure advisers have time to prepare and adapt before bonus commission rate changes are implemented on 1 October. Partners Life has noted that this adaption period is sufficient for advisers to understand the Customer Outcome Matrix process. Partners Life has also noted that they are in the process of completing changes to ensure regular reporting on Customer Outcome Matrix results.

“We have always maintained that we have wanted to provide at least 3 months visibility to the COM reporting prior any Bonus Commission changes coming into effect, allowing you sufficient time to review your own reporting and to be able to understand the feedback and how this relates to your engagement and servicing of clients.

We have continued to make good progress and are nearing the completion of the implementation project.

Given the material changes associated with COM, and with the many other industry changes that are occurring, we have however, made the decision to extend the ‘Go-live’ date for potential bonus rate changes to 1 October 2021.

We are confident that this will not only provide a robust reporting period to allow you to understand and get comfortable with the COM data but will also allow you to continue to encourage your clients to expect and participate in the COM survey process.

We will further underpin your current bonus rates until 30 September 2021 to provide you with an appropriate period of time to understand and adapt to the results of the COM.

We are close to completing the necessary changes to MPL to provide you with regular reporting on your COM results from your MPL dashboard. We envisage this being available towards the end of April.

Full implementation of COM, including the Bonus Commission levels, will now commence on 1 October 2021.”

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AMP sell part of AMP Capital Private, and more daily news

It has been announced that 60% of the AMP Capital private markets investment business will be purchased by Ares Management. It was previously reported the non-binding sale was off the table. The new sale proposal is a more limited joint-venture that will allow Ares to acquire the majority stake in the AMP Capital infrastructure debt, real estate and other minority interests. This is stake is valued at A$2.25 billion. AMP will own AMP Capital’s public markets businesses, with the Multi-Asset Group transferred to AMP Australia.

“Ares Management will buy 60 per cent of the AMP Capital private markets investment business in a proposed deal announced this morning.

After ditching efforts to by all of the ASX-listed AMP in February, the US investment firm has instead opted for a more limited joint-venture arrangement to be explored over the next 30 days in a just-inked non-binding heads of agreement.

Under the deal Ares would acquire the majority stake in the AMP Capital infrastructure debt, real estate and other “minority interests” valued at A$2.25 billion, according to a release issued this morning.

“AMP will retain ownership of AMP Capital’s public markets businesses, which in FY 20 made a modest NPAT contribution,” the statement says. “The public markets strategy will continue, including the Multi-Asset Group (“MAG”) being transformed and transferred to AMP Australia, and actively exploring sale or partnership opportunities for the Global Equities and Fixed Income (“GEFI”) business.” Click here to read more 

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Cigna: Cigna has announced multi-benefit promotion extended to 30 June 2021

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nib: nib conducting another review of existing members policies' exclusions and loadings. Members with special terms on their policies will be contacted by nib directly

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AIA Vitality enhancements on the horizon, and more daily news

AIA chief partnership insurance officer Sam Tremethick shared insights on AIA Vitality to mark the anniversary of the launch. Tremethick noted that AIA Vitality has been embraced by clients and the wider community. Although AIA has reported a high level of engagement, Tremethick has said that the insurer is looking to introduce enhancements next month. Tremethick described AIA Vitality as the cornerstone of what AIA does in terms of shared values.

““We’re over a year into Vitality being launched here in New Zealand, and the great thing is that the community and our clients have really taken to it,” Tremethick commented.

 

“We’re planning to release some further updates in March which will provide some further benefits to clients, and a further update will happen in June.”

 

“We’re continuing to evolve, but we’re already seeing some incredibly high levels of engagement,” he added.

 

“The release of the Apple Watch benefit last year also increased people’s interest in the programme, so we’re certainly continuing to come up with new ideas.”

 

Tremethick says that Vitality has been key to its mission of helping Kiwis improve their health and catch illnesses early, and he says the annual health check benefit and premium incentives have been very successful in promoting these goals.

 

“For us, Vitality is the cornerstone of what we do in terms of shared values,” he said.” Click here to read more

 

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Financial Advice: Financial Advice has reported that they are continuing to develop new tools regarding disclosure, and looking to release it in the next 10 days

nib: 2 Months Free Health Insurance on any new Ultimate Health Max, Ultimate Health or Easy Health policy offer ends 28 February 

MBIE: MBIE has updated the FSPR with information on FAP linking


Asteron Life on dealing with compliants, and more daily news

Asteron Life has notified advisers that it would like to know when a customer compliant relating to the insurer is brought forward. Asteron Life has said that this presents an opportunity to improve services. Asteron Life has prepared a shareable information sheet about the steps to support clients through their complaint process.

“If a client has a complaint, we want to know about it because we see it as an opportunity to put things right and improve our service for the future.

We take complaints seriously, whether it’s about our products, services or something else. Our established complaints management process - which meets regulatory and industry code of practice obligations - ensures we put the client at the heart of everything we do. It also means we are able to acknowledge and respond to a client complaint in a timely manner.”

Since you work so closely between Asteron Life and the client, you may end up being the recipient of a complaint about Asteron Life. So our team can do everything they can to resolve it, we have put together a simple one-page guide on how you can support the client and report the complaint. The guide includes an outline of how to spot a complaint, how to deal with a complaint and who to notify at Asteron Life.

This document is not for clients, but rather an easy process for you to follow. Please feel free to share the guide with your colleagues who may also receive complaints from clients. If a client would like to know more about the complaints process they can visit the Asteron Life website or call us on 0800 737 101.”

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FADC rules adviser in breach of code standard, and more daily news

The Financial Advisers Disciplinary Committee (FADC) has concluded that an adviser breached the Code of Professional Conduct for Authorised Financial Advisers. The case was brought forward by the FMA after it begun an investigation on the adviser on 23 August 2019. The adviser, who has name suppression, operated under three different businesses offering financial advice, financial planning, investments, mortgage broking, KiwiSaver, retirement planning, residential property management, and personal and small business tax advice services. Through the FMA investigation, it was found that there were three breaches of Code Standard 15. The breaches were in relation to financial advice, personalised services, and client relationship management provided to three clients. Advisers looking to ensure that their advice processes are up to standard would benefit from our Advice Process Management service.

“The Financial Advisers Disciplinary Committee (FADC) has today published its decision regarding a case brought by the FMA. The case relates to alleged breaches of the Code of Professional Conduct for Authorised Financial Advisers.

It says that "this is a case about breaches of the Code". It is not about the integrity of the financial adviser. "There is no suggestion that she has improperly benefited at the expense of her clients, or that any client has been disadvantaged."

"But, the provisions of the Code are fundamental and adherence to them is always required."

The financial adviser still has interim name suppression, but the decision says she registered as an AFA on the FSPR in 2011. She offers a range of services including financial advice, financial planning, investments, mortgage broking, KiwiSaver, retirement planning, residential property management and personal and small business tax advice (as a tax agent) through her business. She trades under three businesses, one of which is registered on the FSPR from 2011 as an employer or principal of a financial adviser and/or Qualifying Financial Entity.

After an unrelated complaint in January 2018, the FMA took an interest in the AFA, which culminated in a monitoring visit to the premises in May 2019, and a desk based review in July 2019.

As a result of these two visits, the FMA began an investigation on August 23, 2019.

The investigation found that the AFA breached standards 12 and 15 of the Code, which relate to keeping information about personalised services for retail clients, and the requirement to have an adequate knowledge of Code, Act and laws.

The court briefing says that "The breaches are established in respect of three clients, whose identities are permanently suppressed; it consists of the adviser having failed:

  1. to record in writing adequate information about a personalised service provided to a retail client
  2. to demonstrate adequate knowledge of the relevant legislative obligations which result from the term ‘personalised service’."” Click here to read more

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Southern Cross Travel Insurance appoints new CEO, and more daily news

Southern Cross announced that Jo McCauley will take on the role of CEO. McCauley was promoted from her role as Chief Customer Officer. McCauley brings with her years of experience in financial services and strategic leadership. Her previous roles include insurance portfolios management at Tesco Bank.

“McCauley was hired from within the business, previously heading up SCTI’s sales, product and marketing division as Chief Customer Officer since October 2017.

Bringing a wealth of experience in financial services and strategic leadership, McCauley’s background spans several years of international product and marketing experience, including managing direct-to-consumer insurance portfolios with Tesco Bank in the UK.”

McCauley has said COVID-19 has had a significant impact on the company and the travel industry but Southern Cross Travel Insurance is focused on members and employees. McCauley has noted that she is proud to have the opportunity to be the CEO. Greg Gent, Southern Cross Chairman, has said that McCauley's experience within the company will be an asset.

“McCauley said while the outbreak of COVID-19 this year has had a significant impact on SCTI and the whole travel industry, their focus is on looking after its customers and its people.

“I’m proud to have the opportunity to lead a fantastic team that continues to work hard to improve SCTI’s customer experience and processes for when the market returns."

Southern Cross Chairman Greg Gent said Jo’s experience working as part of the business will be a significant asset to SCTI.

“Jo has a diverse range of skills and leadership experience in the financial services sector, and her direct knowledge of Southern Cross Travel Insurance and its products will provide a strong foundation to lead from,” he said.”

McCauley has managed the launch of the domestic travel insurance product as CEO. As part of the product development, McCauley overlooked the policy wording to ensure that it was easy to understand. As a result, the company was the first travel insurer to be awarded the WriteMark plain language endorsement.

“In her first weeks in the CEO role, McCauley managed the launch of the business’ new domestic travel insurance product, ensuring that the policy was written in plain language. SCTI is the first travel insurer in New Zealand to have its domestic travel insurance policy awarded the WriteMark plain language endorsement.” Click here to read more

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Partners Life announce MUM Application Pack launch, and more daily news

Partners Life has launched the MUM Application Pack. This pack works to simplify the recordkeeping process. The pack is designed to email advisers Personal Statement of disclosures and an updated quote letter after a MUM application is submitted. The letter will include detailed application information.

“Collating a client’s documents for your records has thus far been a multi-step process requiring you to save a client’s quote and personal statement separately. We have also received feedback that additional information (for example client contact details) is required in the documents outputted from MUM to ensure accuracy and completeness of your records. We have taken all this feedback on board and are happy to announce today the launch of the MUM Application Pack.

The MUM Application Pack is generated and emailed to you after submitting a MUM application. This happens automatically and removes the need to generate and save documents while busy with your client – they’ll be waiting for you in your inbox.

The Application Pack email generated by MUM combines each client’s individual Personal Statement of disclosures (labelled individually for easy record keeping) as well as a new updated quote letter containing a client’s comprehensive application information. This new quote letter includes the following features:

  • The quoted benefits and sums insured used to apply for cover
  • Client contact details captured into MUM during the application process
  • Policy ownership details captured into MUM during the application process
  • Premium payment details
  • Existing insurance covers captured into MUM during the application process
  • For covers accepted by MUM: any special terms (loadings, exclusions etc.) will be displayed
  • For clients that require further underwriting: an explanatory note will indicate further underwriting assessment is required”

Additionally, advisers are now able to send clients a copy of their Personal Statement of disclosures from MUM.

“We are also adding new functionality into MUM making it easier than ever to get your clients a copy of their Personal Statement of disclosures. In addition to the existing functionality that allows you to download the Personal Statements, you will now be able to select the option to email each client their Personal Statement directly from MUM. This single-click option ensures each client will be emailed a copy of their Personal Statement, removing the need for you to download and save each document separately.”

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