You can check out my latest piece on trust and insurance at goodreturns at this link: https://www.goodreturns.co.nz/
I've written about the three big themes driving consumer behaviour over at goodreturns, here is the link:
“Partners Life has begun collecting data from clients about how advisers are performing against its Customer Outcomes Matrix.
This forms part of its new commission structure. Advisers who are shown to be delivering superior service for their clients will receive more remuneration.
The matrix covers six indicators of adviser performance: Customer advice complaints; the initial advice process; replacement advice process; cancellation advice; non-disclosure and misstatements at claim time; and service activity.
Under new rules, insurers will have to be able to show that they have clear monitoring of the conduct of all those involved in the product distribution process, from manufacture to after-sale follow-up.” Click here to read more
Should we review how we talk about price in the life and health sector? That's the subject of my article at goodreturns. https://www.goodreturns.co.nz/article/976516669/pricing-strategy-choices-and-their-meanings.html
You can check out my most recent piece at goodreturns at this link: https://www.goodreturns.co.nz/article/976516668/looking-through-the-crisis-or-looking-into-it.html
It would probably be helpful if FSLAA implementation were delayed as well. Not just for insurance advisers, but for our community as a whole. During an event in which there is a heightened consciousness of risk insurance companies and advisers are much in focus, with plenty of calls and activities from clients. There has been a jump of 20% in quotemonster usage over a couple of weeks ago, and insurers are experiencing higher levels of inquiry and application. As a sector we have a lot on our plates with getting people working effectively from home and supporting our customers. https://www.goodreturns.co.nz/article/976516526/regulation-slowing-is-fslaa-next.html
My latest piece is now up on goodreturns. It focuses on Partners Life's latest IP changes - and why they probably don't go far enough. https://www.goodreturns.co.nz/article/976516417/partners-life-changes-may-not-be-big-enough.html
Goodreturns has a piece covering research on why there are fewer women in financial advice. They quote the percentage of female advisers as 23.5% applies only to investment advice, and can be reasonably easily verified with reference to FMA information on AFAs. I am pleased to say the in the area of insurance advice, female participation is quite a bit higher - although no easy reference source exists, the audience at Quotemonster workshops is indicative. I was struck by this comment, however:
"The study said the industry could help by normalising part-time work opportunities"
But many of the changes to the financial advice regime will make part-time work harder. In Australia advisers are telling me that the requirements of FASEA (much tougher than in New Zealand, and probably needlessly so) will make exactly the kind of part-time work the authors envisage impossible.
Goodreturns has a piece by-lined BusinessDesk which is pessimistic about the outcomes for introducing the Conduct of Financial Institutions reforms. I found the attitude of the article intensely disappointing. Not because there aren't problems, when there plainly are problems. Not for the numbers that were right, or the numbers that were wrong - some are hard facts and some are conjecture, and we are all entitled to share a point of view. Not for the failure to be even handed, although it wasn't: the author is particularly critical of advisers, but the Hayne commission tended to find the biggest problems in direct and vertically integrated channels.
The main reason I am particularly disappointed is that it fails the standard the industry is being held to: it fails to address what a good customer outcome really is, and consider what the right pathway is to that. Instead it focuses on a few proxy numbers. Minister Faafoi does better because they have a vision of increasing confidence and clarity for consumers. MBIE does better because they consider efficiency as a whole and suitability throughout the product life-cycle as important factors. The industry does better because, contrary to the assertion in the article, they do look at more numbers than just new business. Lots of advisers, managers, owners, and leaders care a great deal about customer outcomes. Only one was quoted, but I could quote hundreds more. There are many differing views among them, interesting views that are actually shaping the future.
There are progressive parts of the sector that embrace change, and there are others that prefer a risk avoidance strategy. A customer-focused view of industry problems needs to consider the fundamental challenges of writing complex business with a multi-decade time-frame. Those include: complexity, information asymmetry, data availability, equity between customers, and customer engagement.
Contrary to the viewpoint in the article I think COFI has had a substantial effect already. An enormous amount of work by industry groups has been done to try and understand, guide, and change what goes on inside businesses, channels, and the conversations with customers however they engage, to address the real difficulties listed above - much of it has been work in progress and pre-dates COFI and the conduct review, such as the FSC Code of practice. I track every product change, every pricing change, at least a dozen products that had been unchanged for years have been updated and pricing revised. At least one product line has essentially been abandoned by the industry as a whole. That might be good - but being un-replaced there is a lot of unmet insurance need. Other changes are not solely conduct driven, but are related, like the acquisitions of bank insurers by specialists and the opening of new channels. There has been more change in the industry in 2019 than anyone thought possible in, say, 2017. 2020 looks like being even busier. Contrary to the pessimism displayed by the BusinessDesk piece few pieces of law or regulatory change can claim such success.
That's the theme of my latest piece at goodreturns which draws on some astonishing examples of guidance to advisers in Australia.