Ignite is being held at the Christchurch Convention Centre and among those confirmed to take part include optimist Chris Riddell and financial adviser, best-selling author and podcaster Victoria Devine. - Dee-Vine – among many others....

Cigna has updated the occupation classes it uses in its online quote tool. A new field has been created so advisers can indicate whether the customer’s occupation is E (eligible), U (uninsurable), or IC (requires individual consideration for disability benefits).

The firm’s Chief Operating Officer Debbie Eyre says the update is part of a raft of changes to be announced by the firm. She will provide more details during a Cigna Live event to be held on 28 April.

And staying with Cigna...

The firm's offering new clients who purchase an insurance policy with the Cigna two months' free cover. The offer runs until 30 June and applies to Cigna’s assurance extra, business assurance, business extra, and agribusiness extra policies issued before 31 August 2022.

Compliance refinery

A FAP director support programme has been launched by Compliance Refinery in conjunction with governance specialists Faraday & Company.

Melanie Purdey, Compliance Refinery’s course facilitator, says directors of FAPs or authorised bodies are facing more scrutiny as part of the FMA's FAP licensing guidelines, and that many directors may not fully understand their licence obligations.

Purdey says Compliance Refinery's director support programme is designed to ensure directors have the knowledge and skills to meet the requirements of the full licencing regime.

Strategi

Industry training firm Strategi and the FMA are holding a free webinar on Thursday 7 April for financial advice providers who have not yet submitted their application for a full FAP licence.

Strategi says that by attending the webinar, FAPs and their owners and managers will better understand what is required and be provided with practical next steps to obtain their full FAP licence.

Southern Cross Healthcare’s has appointed Chris White as its new CEO, White has been sitting in the top chair for a few months as interim CEO.

White began with Southern Cross on the insurance side of the business in 2017. From there, he moved across to its healthcare division as Chief Operating Officer, and then to interim CEO in October last year.

For the full story on everything covered in this podcast see riskinfo nz . Co . Nz where you can also sign-up to receive our free weekly newsletter.

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She also said there will be substantial change at the organisation over the next few years, building new capabilities, and employing new staff with different areas of expertise.

Actuality - Barrass

How insurers take Covid-19 vaccination status into account when setting life and health premiums is fraught with issues, write lawyers Andrew Horne and Olivia de Pont of law firm Minter Ellison Rudd Watts.

They say rating risk based on vaccination status is not a straightforward exercise as lapsed vaccination status and natural herd immunity may need to be considered.

Partners Life has released a 'how to' video (below) explaining how financial advisers should use the latest additions to its My Underwriting Manager system – namely the Client Access to Personal Statement (CAPS) feature.

The updated version of My Underwriting Manager allows advisers working with the firm to send their clients a secure link to complete their personal statement, in their own time, and on their own device.

The company also says ANZ's chief financial officer Stewart Taylor is to join the firm as its CFO – but no start date has been announced.

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Strategi's Dave Greenslade cautions business owners not to buy a book that is so large it would be hard to contact all the new clients within 12 months.

He says the FMA expects the purchaser to undertake due diligence to ascertain the quality of the client advice records within one year of purchase.

A new advertising code came in on 1 March that means all financial advertising needs to demonstrates a high standard of social responsibility.

The code means financial advertisements should disclose all relevant information, including social media, emails, TV, radio and other platforms

Lawyers at Dentons, Kensington, Swan say the principle of social responsibility is in the spirit of the Advertising Standards Authority code and you don't have to break the rules to breach it.

Financial advisers working with Cigna are being asked to complete online courses and meet declaration requirements via its Adviser Training Hub.

Requirements include annual product recertification and declarations to help advisers stay ahead of their compliance obligations.

Cigna has a new online My Score Card tool that's connected to MBIE’s Financial Service Provider Register.

A client review call centre is being launched by The Adviser Platform to help reduce the load on busy advisers.

The company's Ryan Edwards says the service, to be launched 1 April, will demonstrate to the regulators that an adequate level of servicing is being provided to clients and improve client retention.

Fidelity Life has launched a podcast covering the key elements of its Building Better Business modules.

Each of the company’s podcasts is around four minutes long and covers topics such as complaint handling, communication, and business plans.

A new report from PWC highlights recruitment, regulations, and crime as being among the key challenges faced by New Zealand insurers.

The 15-page report – Exploring the Insurance Industry’s Top Risks – identifies a rising level of anxiety about cybercrime and the new financial conduct regime.

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Details of the purchase were first released by Fidelity Life in July 2021 when it said it would acquire Westpac Life from Westpac Group for NZ$400m, and will also into a 15-year life insurance distribution arrangement with Westpac NZ.

Fidelity Life’s largest shareholder the NZ Super Fund and new investor Nigh – Tahoo - Ngāi Tahu Holdings will fund the majority of the acquisition.

The latest industry snapshot from the FSC shows life insurance covers increased by 92,000 to 4.2 million during 2021.

The data snapshot also shows the sector paid out $308 million in claims in the last quarter of 2021 and that 96% of claims made over the same period were paid.

We have a new poll running this week asking about your work-related stress levels – cast your vote...

Kiwis who act on professional financial advice are better prepared for retirement and more comfortable making big financial decisions than unadvised Kiwis, according to a new report from Financial Advice NZ.

Its Better Behaviours report shows that across every age band, advised Kiwis feel they have a better understanding of how much money they will need in retirement.

Across the board, quality financial advice has given Kiwis the tools to think about their finances in a pro-active way, says Katrina Shanks.

Asteron Life is extending the Best Doctors telehealth service to its customers with trauma recovery and cancer cover.

The service, which provides access to an international network of medical specialists and local GPs, is already available to the company’s clients with disability insurance as well as eligible insurance advisers.

And staying with best Doctors, AIA NZ is extending the Best Doctors service to financial advisers who have a relationship with the firm.

A draft version of the Insurance Contract Bill has been released for consultation by MBIE.

If made into law, the bill would introduce a range of changes that MBIE says will make insurance contracts easier to understand and fairer to consumers. However, industry feedback is being sought prior to the draft Bill has its first reading in parliament.

The value of locum advisers to help maintain business continuity when a member of the financial adviser team is away will be debated during a financial services council webinar on March 11.

Discussing the issues, risks, and solutions will be a panel made up of representatives from insurer Partners Life, law firm Dentons Kensington Swann, and Rose-will Consulting.

Financial Advice NZ launched its own financial adviser locum scheme in November last 2021.

According to Stats NZ data 1.45 million New Zealanders are paying almost $2 billion a year for private heath insurance. The country’s population sits at 5.2 million. In the last quarter of 2021 more than $386 million was paid out by health insurers, with women aged under 64 having higher value claims than men. From age 65 men claimed more than women during the same period.

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Since September 2020 Grant Willis has been overseeing the sales, products, claims and client servicing at Asteron Life. Against a backdrop of modernising the company's operations it is helping advisers get across the line when it comes to full licensing.

However, speaking to RiskinfoNZ he says the whole licensing process is still distracting advisers from doing the things they enjoy most...

Read our full interview with Grant Willis at RiskinfoNZ.co.nz

Welcome back.

Writing for Riskinfo Katrina Shanks says lockdowns have given many of us the mental and physical space to reassess almost every facet of our life – and that Covid seems to have prompted what some experts call ‘a mass redirection of priorities’.

The CEO of FANZ points to an international survey that concludes that whatever ‘material well-being’ looks like, financial considerations were top of mind for most respondents – including those in New Zealand.

Poll: New Poll – Is the FMA Right to be Worried About Rising Commission Payments?

AIA NZ is running a promotion where clients can win a share of $10,000 in Apple Store gifts cards.

The draw is open to clients who take out eligible AIA insurance and join its AIA Vitality scheme before 1 April 2022. T

Cigna has teamed up with food delivery service HelloFresh in a promotion that will see winners receive prizes worth hundreds of dollars.

Entry to the free draw is for customers who obtain a quote for a new Assurance Extra policy through Cigna’s online quote tool.

And this Thursday 17 February the FSC is holding its online Future Ready Summit. Find out more and get tickets via the FSC website at fsc.org.nz/

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The FMA has re-stated its ongoing concerns around what it refers to as ‘commission creep’ within the financial advice sector.

Its concern was raised in the authority’s 2021 annual report – released at the end of January.

“Sales-based incentives for staff have generally been replaced with incentives that focus more on good outcomes for customers,” says the FMA.

However, it still has concerns about commissions paid to intermediaries.

When Minister of Finance Grant Robertson announced details of a proposed State-backed income insurance scheme, RiskinfoNZ sought the reactions of industry groups and of the insurers themselves.

It's early days as all concerned take a close look at the government briefing document, but we have the initial thoughts and opinions in our special report.

With the country having moved to the Traffic Light settings of the Covid-19 Protection Framework, and with Level 4 Lockdowns (hopefully) behind us, Partners Life has reverted to its original criteria for premium holiday and policy suspension claims. The company relaxed its policy on premium holidays in August 2021.

Raising the status of financial advisers to a professional standing is taking longer than expected, but Mitre Wealth Management‘s Stephen O’Connor knew it wouldn’t be as easy “as flicking a switch”.

Speaking to David Kneebone in a Financial Advice NZ This is Your Story programme O’Connor says he expects the Level 5 qualification financial advisers need will eventually be raised to a university degree requirement.

However, he says upping the professionalism of the financial advice sector has been a slow grind.

The team at nib is taking its Highway to Health seminar on the road starting February 10.

The events will feature CEO Rob Hennin who will talk about the firm’s acquisition of Kiwi Insurance. Attendees will also hear about nib’s health management programmes.

Our latest poll asks you to consider your preferences when it comes to paper-based versus electronic policy applications.

In 2022, which life insurance policy application process do you prefer:

• Electronic/online applications (52%)
• Paper-based applications (27%)
• Depends on the client’s circumstances (21%)
• Not sure (0%)

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The firm says it will save advisers time, benefit clients living in different locations to the adviser, and streamline the application process.

Poll - Our latest poll asks you to consider your preferences when it comes to paper-based versus electronic policy applications.

When AIA NZ’s CEO Nick Stanhope went on extended leave in November last year, the firm’s Sharron Botica (pictured) stepped in to run the show. However, she’s been doing more than just holding the fort.

She says Covid and lockdowns made all of us focus on the digitisation of the business. And that delivering a frictionless system for advisers is key.

Botica also says growing AIA NZ’s share of market by taking business away from competitors doesn’t help the sector grow. She says the firm is developing new products to help make the pie bigger.

Read the full interview at riskinfo NZ .co .nz

And sticking with AIA NZ, Dame Paula Rebstock has joined the board of the insurer as an Independent Non-Executive Director.

Rebstock holds a Master’s degree in Economics from the London School of Economics and has extensive professional experience in corporate and public services governance,.

Dave Greenslade, Executive Director at Strategi, says FAPs and others working across the sector should consider forming a plan of ongoing training to keep ahead of the FMA's requirements.

He suggests a professional development plan (PDP) be put in place, saying the new advice regime effectively drags all providers of financial advice up to and slightly beyond the standard expected of AFAs.

Greenslade recommends all financial advisers and nominated representatives develop and maintain a PDP.

In a column for risk info nz Financial Advice NZ's CEO Katrina Shanks provides a quick overview of where the advice community should focus their efforts this year.

The organisation has launched a tool kit for members to help them stay on track when it comes to meeting regulatory requirements ahead of the March 2023 cut-off date for fill licencing.

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The FMA established a dedicated financial advice team in 2020. It had nine staff in a year ago, currently has a team of 17 and there's plans to increase this to 20.

Greenslade also expects to see more business consolidation this year and warns of a national shortage of skilled financial services staff.

Welcome back

Two regional events organised by Financial Advice NZ will be going ahead as planned under the government's Red traffic light setting.

The organisation's CEO Katrina Shanks says its regional meetings in Auckland and Christchurch will continue under the new rules.

Its first regional meeting of the year is planned for February 15 in Christchurch and the Auckland event is on February 24.

Last week we asked what levels of life insurance business you expect to write this year.

While the poll still has a week to go the current picture shows that 60% of you anticipate writing more business, 20% indicate they will write less business than last year and a further 20% reckon it will be about the same as 2021.

The poll closes on Monday 31 January.

The Adviser Platform is to hold four adviser roadshows across the country during February to talk about FAP licensing and mental wellbeing with support from insurer AIA NZ.

Ryan Edwards, Managing Director at The Adviser Platform says the roadshows will focus on a combination of wellness, compliance readiness, and address the mental anxiety of licensing.

In Australia, Research firm Wealth Data is expecting the number of advisers operating there to drop by around 1200 to 16,000 by the end of the year.

Writing in his first weekly report for the year, Wealth Data’s Colin Williams says that 2021 was difficult year for advice firms with very few bright spots.

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A report by Swiss Re expects life insurance premiums across the Asia Pacific region to rise in real terms with Australia leading the way. The report’s authors expect life premiums in Australia to increase by 10.5% this year.

The report's author say trends in major Asia-Pacific markets find consistent evidence of consumers’ rising awareness of health and mortality risks and a perception of being under-insured. The change in risk perception is reflected in observed growth in life and health insurance premiums.

Partners Life is holding a three-day online training course for advisers who have worked in the industry for less than 24 months. The company’s new adviser course is free, run by industry leaders and is being held in late February.

For the first poll question of the year we're asking what levels of life insurance business do you expect to write in 2022?

Southern Cross Health Insurance has launched the next chapter in its ‘With You’ marketing campaign with a new TV commercial featuring some of the staff of its 3,500 business clients at work.

And in related news, Southern Cross Healthcare will start fitting out its newest hospital in the north Auckland suburb of Silverdale this year.

It will have three operating theatres, a 10-bed ward, and is expected to open in mid-2023.

Consumers have increasingly embraced digital communication as a direct result of government lockdowns getting in the way of face-to-face consultations with their financial adviser claims a new report.

The State of Customer Conversations survey of financial services, insurance, and healthcare companies found

80% of customers prefer email

50% are comfortable with text messages

The best way for companies to succeed in this next era of customer conversations is to prioritise digital-first says James Brown, CEO, Smart Communications.

AIA NZ has released details of how $500,000 of grant money was used by community groups across the country last year.

Grants have been used to help children learn to swim, mental wellbeing programs and courses promoting mindfulness and resilience.

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Cigna is extending its two-month free cover offer for new and existing policy holders, while paying advisers double service commissions during the campaign.

Originally slated to end on December 17 2021, the offer has been extended to January 31 2022, where the new or updated contract is issued before 18 March.

In keeping with its ‘Good things come in two‘ campaign, advisers will receive twice the normal service commission for two months for all new business or existing policy increases sold during the campaign period.

Former Act MP Heather Roy s the new Chair of Financial Advice New Zealand. She has been contributing to the board as an independent director for one year, and was made interim chair at the organisation’s 15 November 2021 AGM when Sue Brown stepped down having completing her four-year term. Roy's appointment is for three years.

In a column for RiskInfoNZ Financial Advice NZ's Katrina Shanks looks back on 2021, lockdowns, social distancing and how technology has helps advisers navigate a difficult year. Read more at risk info

A report based on an insurance industry survey by the Deloitte Center for Financial Services is bullish when it comes to the sector’s growth prospects for 2022 and recommends companies develop in-house talent rather than acquiring it.

Most respondents to its survey cited plans to increase investment in technology and evolving talent models to build on the digital and virtual platforms that sustained their operations and maintained their engagement with customers during 2021.

Southern Cross Healthcare will start fitting out its newest hospital in the north Auckland suburb of Silverdale within the next six months. The facility will be used to cater for the growing demand for care in the Hibiscus Coast and Bays areas.

The hospital – on the second floor of the Silverdale Medical & Surgical building – will have three operating theatres, a 10-bed ward, and is expected to open in mid-2023. The facility will also have nine recovery chairs for day surgeries.

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Work overload was also cited by almost 50% of respondents as another major cause of stress.

AIA fears 25% of Kiwi advisers are considering leaving the industry and another alarm bell is that around half the advisers surveyed use alcohol to cope with stress, aren’t sleeping enough, and a good portion are seeking medical care due to work pressure and stress, says the report’s draft findings.

Riskinfo nz has been promoting the survey since its launch in September and full results will be released in February 2022.

The FMA has cancelled the transitional financial advice provider (FAP) licence assigned to Yuen Pok (Paul) Loo, sole proprietor of Wisdom House Investment Partners, after Loo engaged in serious misconduct at his previous employer.

James Greig, FMA Director of Supervision, says: “Trust in the financial advice sector is imperative and any misconduct that undermines that must be held to account.

“A licence cancellation is a strong regulatory response and we decided it was necessary in this case to send a strong message of deterrence.”

Katrina Shanks, writing for Riskinfo NZ says life and health insurers have started looking at what their global counterparts are doing about Covid-19 and people’s vaccination status.

She says insurers in South Africa and other countries already require people to disclose their vaccination status when taking out life or health cover.

The CEO of Financial advice nz says New Zealand-based insurers might follow suit and include this information in their underwriting considerations for new applicants, with a focus on pre-existing conditions that are more likely to result in a claimable event if an unvaccinated client contracts Covid-19.

It’s a year since the introduction of the mandatory privacy breach reporting regime and Allan Yeoman of law firm Buddle Findlay says 2021 has seen many businesses over reporting to The Office of the Privacy Commissioner as organisations came to grips with the new requirements and adopted a conservative approach.

He says “Almost four times as many breaches were reported this year when compared with 2020.

Human error accounted for 62% of serious privacy breaches reported, with the most common issue being emails sent to the wrong person.

The board of not-for-profit Kiwi health insurer Accuro, which celebrated its 50th year in 2021, has a new Chair.

Marion Guy has moved up from Deputy Chair having been elected by the board to replace Tony Haycock, who is retiring.

And that's our last podcast for 2021, I'll be back in the new year. But do sign up to our weekly newsletter – out every Wednesday and keep up to date at riskinfonz.co.nz

have a fantastic 2022.

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The remuneration model, first launched by the firm in March, allows advisers to swap a large upfront payment for a smaller monthly income – something that could help avoid troublesome clawbacks.

The firm's David Haak, General manager – Distribution, says: its Pendulum model is one of the most reliable ways to build a long-term resilient business.

Cigna has made its multi-benefit discount, first announced in September 2020, a permanent fixture.

The discount on its Assurance Extra policy will now provide a 5% discount to customers taking Life Cover with one other qualifying cover and a 7% discount to those taking Life Cover with two other qualifying covers.

The change came in on Monday 18 October.

Partners Life has made its first in-house recruitment for appointed actuarial services, bringing in Appointed Actuary (AA) Kate Dron (pictured). She will join the firm’s executive team on 9 November.

Dron’s most recent role was as AA for the Suncorp Group and she previously served as Consulting Actuary in a financial and actuarial services business.

Strategi is offering a warrant of fitness service to advice business owners that includes a review of FAP policies, processes, controls, and advice documents.

The company says it’s a way of identifying what business owners are doing well and what could be improved.

Prices start from $2,800 plus GST.

Signing up new clients is the top priority for advisers who are focused on the future of their business according to the results of our latest poll.

And right behind that is higher client retention followed by reducing the cost of doing business.

Our poll closes on Tuesday 26 October, so there's still time to cast your vote at riskinfoNZ co nz

Health insurer nib is offering complementary Mental Health cover valued at $2,500 for eligible members.

The option is available to members who are covered under a new nib Ultimate Health or Ultimate Health Max policy purchased from 1 October 2021 and provides up to $2,500 of consultations annually with a registered psychologist or psychiatrist on referral from a GP.

A report from AIA NZ has uncovered the five risk factors that lead to the five most common preventable diseases which account for more than 90% of deaths in New Zealand.

It says the five risk factors of physical inactivity, poor nutrition, smoking, excess alcohol and environment interaction, contribute to five common non-communicable diseases:

• Cancer
• Diabetes
• Respiratory disease
• Heart disease
• Poor mental health

Nick Stanhope, AIA NZ Chief Executive, says the case for focusing on health promotion and preventing non-communicable diseases is stronger than ever.

Asteron Life is giving new customers $50 cash for every $500 they pay in annual premiums in a promotion that will run until 17 December 2021 in conjunction with gift company PrezzyCard. The top cash limit is $5,000.

Graham Hill of Asteron Life says the firm wants to give advisers support as they put offers together for their clients.

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The Adviser Platform has launched a new resource called OAT – the Online Advice Tool – to help advisers work within the regulatory regime when advising clients.

Scott Duncan – TAP's Head of Compliance and Advice – says the app has been created with a focus on client engagement, making advice accessible and providing a framework to demonstrate a robust and repeatable process.

With effect from 1 November 2021, level life premium rates at Partners Life will increase by up to 20% for new business.

In a statement the company says the change will bring pricing for guaranteed level life premiums into line with the rest of the market.

The firm has also released a list of electronic signature firms it recognises saying says electronic signature services provide a safe, auditable means for clients to sign documents digitally.

Cigna NZ has appointed Gabe Smith and David Marquis to its digital technology team.

Smith started his role on September 29 having previously worked for Xero, and Marquis begins on October 11 – he was Z Energy's Head of Data Solutions.

Also....Fidelity Life has made a number of key appointments to its strategic alliances team. Melanie Beattie joins the firm in the newly-created role of Head of Strategic Alliances, and joining her are Sean Craigen, who's currently with BNZ, and Mike Whitehead, a business manager at Fidelity Life.

AIA NZ has made obtaining quotes easier and quicker for financial advisers by integrating its system with Xplan – a financial planning and wealth management app.

Within the system, advisers access Quote Builder with the client data pre-populated and the recommended insurance details are automatically transferred via Risk Researcher.

Continuous professional development (CPD) isn’t just a compliance obligation under the new regime, it is an important part of upskilling in your career, says Financial Advice NZ CEO Katrina Shanks. In a special column for RiskinfoNZ she says it's essential to establish a roadmap to check yourself against, keeping in mind that CPD is not a box-ticking exercise.

Surgery for bad backs has topped the list of most expensive surgical claims funded by Southern Cross Health Insurance in the year to 30 June 2021, with the highest individual claim coming to $222,000.

Eight of the top 10 most expensive claims paid by the health insurer were for spinal fusions – surgery which permanently connects two or more vertebrae in the spine – with four claims topping a whopping $200,000.

Hundreds of financial advisers have responded to AIA NZ’s wellbeing survey as the firm works to gauge how those working in the sector are coping with regulatory changes and working under gloomy atmosphere of Covid-19.

Listen to our special podcast edition with the firm Sam Tremethick at www.riskinfonz.co.nz

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Having just returned from Sydney, where she was Head of digital insurance firm, Kirwan says the advice regime across the Ditch is too restrictive for advisers.

Despite this year’s changes and tightening of the regulatory landscape, Kirwan says the advice industry here is “…laden with opportunity”.

CLIP

That's Bronwyn Kirwan speaking in a Fidelity Life video.

Up to 60 financial advisers face being deregistered from the FSPR unless they update Companies Office with details of their dispute resolution scheme provider.

A total of 189 financial advisers were asked by Companies Office to update details by 17 August, and so far only 129 advisers have responded.

Financial Advisers are not deemed to be an essential service under the current alert level 4 lockdown, which is set to remain in place until 31 August in Auckland. But the FMA is pushing to change this.

The regulator says it is working towards having financial advice included in the next round of amendments or receiving a class exemption from the order.

New poll: With financial advice not deemed an essential service by the Government during the current level 4 lockdown, RiskinfoNZ wonders if this has affected your advice business. Cast your vote in our poll at riskinfonz.co.nz

Health insurer nib New Zealand’s annual premium revenue to June rose by almost 10% when compared with its 2020 figure. It recorded a total revenue of just over $277 million and a profit of almost $26 million.

The New Zealand firm’s full year result includes the release of a $9 million provision to cover-off an expected claims catch-up of postponed or delayed medical treatments due to government Covid-19 lockdowns.

Keep up to date with the latest news for financial advisers at riskinfonz.co.nz

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The government has taken the first steps to establish a Consumer Data Right (CDR), a legal framework for companies to share their client’s personal information with competitors – so consumers can easily switch their business from one business to another.

However, based on submissions to MBIE, the idea does not have the universal support of insurance firms.

For example, Partners Life says a potential problem in developing a CDR system is the collection of legacy information from older systems – which could be expensive.

And Fidelity Life highlighted the difficulty of comparing the life insurance industry with banking and utility sectors saying life insurance should be excluded from any consumer data right system.

Australia deveoped a CDR system in 2019 which excludes life insurance.

The FMA has released its annual corporate plan outlining the organisation’s priorities for the next 12 months.

Its CEO Rob Everett says a review of insurance contract law is underway and that industry consultation on a draft bill is expected to take place later in 2021.

The proposed reform will give the FMA powers to monitor and enforce compliance with the new requirements.

Financial Advice NZ’s CEO Katrina Shanks says in a year of changing regulations and the impact of Covid it’s important to talk about the mental wellbeing of financial advisers.

A survey of financial advisers in Australia paints a grim picture of depression and low levels of wellbeing, and Shanks says the situation could be similar in New Zealand.

Her organisation has a peer support programme with 30 senior advisers volunteering their time. Shanks says mentoring and coaching can make a big difference in mitigating stress, coping with the workload, and approaching challenges with a different perspective.

Contact FANZ for more information.

Poll

With plenty of evidence appearing to show that many kiwis lack the skills to manage their money or have an appreciation for the value of insurance, some organisations are connecting directly with school students.

According to the results of our latest poll, it seems many of you agree it's something you'd like to do too.

In our latest poll, 50% of you say your advice business should develop relationships with local schools to help address financial literacy and underinsurance.

The poll closes on July 26.

A report by IBM says until recently insurers didn’t need to be overly concerned about how they were perceived by their customers – claiming the industry focused more on selling than providing good customer service.

Its report says social media platforms have helped insurance move away from being a product that is sold to one that is bought, and the right customer experience drives purchasing decisions.

Among IBM's recommendations is that insurers evolve from being a traditional coverage provider to trusted adviser.

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JP Morgan is handling the sale for Westpac and Riskinfo NZ has contacted New Zealand's top insurers to see what their interest is in obtaining the bank's Life book – said to be valued at around $500 million.

A new publication from Strateg - eye Compliance aims to show financial advisers that working under the new regulatory regime is more flexible than many may believe – while also revealing the firm’s checklist for reviewing compliance standards.

Its publication – What does compliant financial advice really look like? – is aimed at financial advisers, managers and owners of financial advice providers.

The Adviser Platform (TAP) is offering professional indemnity (PI) cover underwritten by international insurance firm QBE.

Single adviser pricing starts at $2,600 a year and includes a $10 million limit on any one claim.

The number of privacy breach notifications seen by the Privacy Commissioner nearly doubled in the six months to May.

The commissioner saw a 97% increase in privacy breach notifications since the new Privacy Act came into force on December 1, when compared to the six months prior to its introduction.

The most common category of privacy breaches were email errors, with emails containing sensitive information going to the wrong person.

Partners Life is helping school students understand the value of money and insurance by lending its technical expertise to help create a life and health insurance education module for financial education firm Banqer.

In addition to technical help, the insurance firm’s sponsorship pays for an additional 1,250 students to access the platform at no cost.

Partners Life Chief Marketing Officer Kris Ballantyne says Research shows that normalising lessons through education is an important step towards developing financial capability from a young age.

Look out for our monthly wrap of the month's biggest stories, it will be in your inbox before the weekend.

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Kiwi Adviser Network and Prosper Group are fee-based services that provide a range of business support offerings to advisers – primarily in the lending area – in addition to compliance, software, and mortgage broking.

AIA NZ has announced a string of key appointments this week as it bolsters its support to advisers and clients across the country.

It's appointed business development managers in Wanaka, Christchurch, Wellington and the lower north island.

Massey University has launched a Financial Capability Practitioner Course for those seeking to enhance their practice in the sector.

The $1,200 course is intended to provide participants with a deeper understanding of the ‘strength-based approach’ used by government agencies and the wider financial capability sector.

With more people working from home Auckland IT firm Think Concepts says not all home WiFi networks are secure and could be easily exploited, especially when linked to personal phones and other devices.

The company says that with more sophisticated scams, increased remote working, and more data than ever at risk, cyber security must be an ongoing and proactive process.

A survey by Swiss-Re reveals how the covid virus has changed consumer behaviour, its effect on the insurance industry, and how insurers can better respond to the changing needs of consumers.

It says the stress of the virus has made insurance customers more price sensitive. Swiss-Re also sees a growing trend in consumers wanting to buy policies via an insurer’s website or app.

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Stevens says if a client appears to say they're not happy, then they are telling you they have a complaint.

She says while some complaints are crystal clear, others may be couched by the client in terms of general unhappiness, and then it is up to the company to delve deeper.

Katrina Shanks, CEO of Financial Advice NZ is urging financial advisers to apply for a full license sooner rather than later.

“Being a more complex application, it will most likely take longer to process it,” she says.

Advisers will need to have a full license by 15 March 2023.

Two insurers are offering premium waivers to help support clients affected by the Canterbury floods.

Fidelity Life is offering to waive premiums for 3 months, while AIA NZ is offering a one-month waiver on life and health policies.

AIA is also fundraising to support World Vision's humanitarian work in India. Locally the firm is donating $30,000 but the global group is hoping to raise $250,000 for the charity.

The majority of those who cast a vote in our current poll indicate they do not have access to the support they need to manage their mental health.

While voting still has one week to go, the results so far show that 68% are not having their needs met. A modest 16% say they have access to the resourced they need, and a further 16% are not sure if the help they need is available.

The poll follows a report out of Australia that indicates that a high proportion of financial advisers are suffering as a result of working under the strain of Covid-19, regulatory change, and other workplace stresses.

Chronic health conditions account for more than 80% of all deaths in New Zealand, but more than a third of this health burden is avoidable, says Amy Tribe, CEO of nib Foundation, the charitable arm of health insurer nib New Zealand.

To help address the issue, nib Foundation has launched Health Smart Grants, its first Kiwi grant programme. Three grants of $40,000 are available to selected registered charities.

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Australian financial advisers will be free to service clients in New Zealand without an FMA licence from 15 March.

The regulator says the exemptions will allow Australian licensees and their representatives to give financial advice to New Zealand retail clients from offshore without getting a financial advice provider licence.

This week's poll

Which brings us on to this week's poll question. With financial advisers in Australia soon to give advice to clients living in New Zealand, is this something you support? That's the question in this week's RiskInfoNZ poll. Cast your vote today.

Get in shape

This year’s Get In Shape advice summits will focus on updating the adviser community on the incoming regulatory regime and suggest ways of working in a world dominated by Covid-19. In all, four summits will be held across the country in Wellington, Christchurch, Dunedin and Auckland – with the Auckland session being broadcast online.

The summits are lead by the Financial Services Council with support from RiskInfoNZ.

Partners Life

The history and key achievements of Partners Life has been published on the firm's website as part of its pledge to be more open and transparent with customers, advisers, and the regulator.

The Partners Life Timeline - you'll find the lick at riskinfonz.co.nz - covers all the customer-centric events that have occurred at the firm since its launch in 2011.

Dual Day

If you like walking, running or cycling then Partners Life Dual Day will be of interest. It's inviting one and all to Motutapu and Rangitoto Islands on Saturday 10 April for its annual fundraiser to support the reforestation of Motutapu Island. To date it has raised $300,000. There's a discount code for advisers who want free tickets and full details are at RiskInfoNZ.co.nz

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Partners Life is preparing to list on the New Zealand Stock Exchange, but only when the time is right, says the firm's Managing Director Naomi Ballantyne.

Just before the year-end the firm announced its purchase of BNZ Life for $290 million and confirmed plans to launch an Initial Public Offering.

While saying any IPO needs to be in a market that is conducive to its success, Ballantyne says the firm has a dividend strategy in place.

Massey University Offers Advisers New Route to Qualification

Massey University has partnered with Australian firm Kaplan Professional to help advisers obtain the New Zealand Certificate in Financial Services (Level 5) [Version 2].

Financial advisers with a transitional licence will have two years in which to qualify if they want to offer financial advice after their licence expires.

Poll Result

Our last poll question of 2020 asked if the decision by NZI to limit its professional indemnity insurance to FAPs with three or more advisers is a cause for concern.

An overwhelming 90 per cent of you say it is – and there's still time to cast your vote.

Of the remaining voters, 6 per cent indicate the decision isn't an issue, and 4 per cent aren't sure.

Doing Good is Good for Business

Caring about customers is a business imperative as well as an ethical one for insurers, says Liz Zhu, a Medical Officer at Southern Cross Health Society.

She says seizing the opportunity to drive societal impact increases the likelihood that the business, and the insurance industry, will grow and thrive over the long term.

Welcome to 2021! The whole team at Risk Info NZ wishes you a happy, safe, and prosperous New Year.

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NZI is to limit its professional indemnity insurance to FAPs with three or more advisers, says the firm. The announcement last week surprised Katrina Shanks,CEO of Financial Advice NZ, who says her organisation will need to settle on a different PI insurer by the end of 2021.

Clinton Stanger of Curated Risk recommends advisers hold PI insurance and not self-insure.

Steven Burgess, Director of Compliance Refinery says while advisers can be diligent and careful, that doesn’t stop the energetic litigious client trying their luck. He says defending claims can quickly run into six figures.

ShareCare

The health & wellness ShareCare app promoted by Fidelity Life has been dropped by the firm less than six months after it was made available to its customers...

The app was introduced by the insurer's former CEO Nadine Tereora, but – says Fidelity Life – managing the impact of Covid-19 lead to a review of its value-add products.

Insurer support

Disruption to everyone’s normal way of life in 2020 forced many insurers to look at what they could do to soften the blow of the pandemic on their staff, as well as support financial advisers, and their customers.

In RiskInfoNZ's review we cherry pick a few notable announcements including Partners Life waiving $5 million in customer premiums and AIA NZ pledging to give away $500,000 to good causes across New Zealand.

Poll question

In the final RiskInfoNZ poll of the year we're asking if the decision by NZI to limit its PI insurance to FAPs with three or more advisers is a cause for concern. Cast your vote today at https://riskinfonz.co.nz

Opinion

In opinion piece this week, Katrina Shanks, CEO of Financial Advice NZ says advisers' clients look for quality of advice, value, speed, convenience and overall quality of service. With this in mind, - she says - face-to-face conversations are the core of the advice relationship.

Remote consultation

The 2021 Global Medical Trends Survey published by WillisTowersWatson reveals that while Covid-19 has led to a significant reduction in healthcare use and overall costs during 2020, the decrease will be short-lived.

The company surveyed 287 insurers across 76 countries and says projected healthcare benefit costs will rebound to 8.1 per cent globally in 2021 (up from this year’s 5.9 per cent). Closer to home, the authors of the report predict the average increase in the Asia Pacific region in 2021 will be 10 per cent.

2020 in review

It's been a frantic year, full of ups and downs, and surprises. Key people have moved from one firm to another, there's been mergers, confusion, and the regulator has made its expectations of the wider financial advice community clear.

To catch up on the key points of the year, check out the end-of-year review at RiskInfoNZ.co.nz

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Strategi Institute has a new training course called Closing the Gaps.

It is aimed at advisers who hold one of the level 5 qualifications but need to prove they have the competence, knowledge, and skill to operate in the new regime which starts on 15 March. The half day course starts at $250 plus GST.

Advert

PI Insurance

Compliance Refinery has published its four top tips for advisers when it comes to professional indemnity insurance.

The firm’s latest briefing document says some PI providers have yet to fully adapt to the incoming regulatory regime, and that while FAP covers are starting to be discussed, they won’t all be in place until March.

Money and You

According to a report by the Financial Services Council 40 per cent of those it surveyed don’t see any benefit in seeking independent financial advice.

Richard Klipin, CEO of the FSC, says Kiwis are taking on increased levels of debt, so to have 75 per cent of respondents say that buying a property wouldn’t trigger taking any external advice is a real area of concern.

Get in Shape

The Financial Services Council is preparing to run its Get in Shape advice summits in February at four locations across the country, the Auckland event will also be live streamed...

Tickets are $65 for the morning session or $95 plus GST with the afternoon masterclass covering licencing and disclosure.

Latest Poll

Our latest poll is still open so there's time to cast your vote. Our question is: are dealer group mergers good for the adviser community?

Of those who have voted so far, 50 per cent say 'no', 42 per cent say 'yes' and 8 per cent aren't sure.

Cigna

Cigna NZ has appointed two new independent directors to its board... Rob Ellis, the CEO of group insurance platform Sentro, replaced Mary-Jane Daly, in August. And former KiwiBank CEO Paul Brock joined the board this month.

Southern Cross

Southern Cross Health paid out more than $564 million in claims in the six months to September, according the the trust's latest Pulse report. The top three highest claims by dollar value were for three spinal fusion procedures with a combined cost of $559,000, and the age of the oldest person to receive treatment via the trust was 104.

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The Customer Outcome Matrix launched by Partners Life in April has been well-received by advisers, says the firm this week. The matrix is a system that includes the insurer surveying customers and marking advisers against a six-point check list that can determine their annual bonuses. The company offers an 80 per cent annual bonus that can be raised to 100 per cent based on survey results.

New ad camapign

Partners Life has launched a advertising campaign featuring popular nursery rhyme characters to promote the importance of having life insurance. The first one featured Humpty Dumpty, who had a great fall without being insured.

New poll

While dealer group mergers might make for stronger companies, is it good for financial advisers? Cast your vote in this week's poll...

Shanks opinion

In an opinion column for RiskInfoNZ, Katrina Shanks of Financial Advice NZ outlines the key points of the incoming regime and what advisers should be doing now to be ready for its introduction on 15 March.

NZQA

Strategi Institute has retained its status as a Category 1 NZQA training provider. David Greenslade, executive director of Strategi Group, says the institute was described by the NZQA as having ‘excellent’ performance in all areas, including its training, teaching, content and student support.

Merger

The Health Funds Association of New Zealand has been merged into the Financial Services Council to create a membership association with almost 90 organisations.

The Health Funds Association is the industry body for health insurers and was set up in 1989. Membership is voluntary and includes eight health insurers who account for more than 80 per cent of active health insurance policies in New Zealand

Free Apple watch

AIA NZ is encouraging its customers to improve their fitness levels with a free Apple Watch offer worth up to $699. AIA Vitality members can buy the watch using an interest-free loan arrangement and AIA will make the payments if users' weekly fitness targets are met.

Australia

The Australian Securities and Investment Commission (ASIC) has has released a draft information sheet on insurance claims handling and settling. This comes in advance of industry participants needing an AFS licence for claims handling, or to be authorised by another AFS licensee.

The Australian regulator says the information sheet follows the introduction of the Financial Sector Reform Bill 2020.

The Australian Securities and Investment Commission has has released a draft information sheet on insurance claims handling and settling ahead of incoming regulations...

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NZ Financial Services Group, which acquired Kepa at the end of October, has appointed Keri Ball-Guymer to the newly-created role of Head of Customer Outcomes. She will work with the firm's CEO Brendon Smith to take on overall responsibility for the company's risk and compliance frameworks. She will join the firm on 14 December from ANZ Bank.

Consultation Opens On FMA's Advertising Expectations

The regulator is preparing to publish a guide to help advisers and the wider financial services industry understand what they can and can't say when it comes to advertising their services and products. But before it does, it's asking for feedback on the draft version of its proposed guide. The FMA says its proposed guidance sets out its expectations of what good conduct looks like. The consultation period ends on in February.

Impact Of Covid On Children Highlighted In Nib Survey

Health insurer nib has released the findings of its second annual State of the Nation Parenting Survey of 1,200 New Zealanders. According to its report, behavioural issues are the number one health concern Kiwi parents have for their children, cited by more than a third (34 per cent) of respondents, up 13 per cent from 2019. The firm has also launched a seasonal promotion offering two months' free health insurance to clients who take out certain policies using nibAPPLY by 31 January 2021.

Social media

Helping financial advisers embrace social media, Google, and online networking to market their services is the aim of a new set of self-help guides from Cigna NZ.

Its PDFs cover things such using Google for marking locally, how to network online, and content ideas for social media posts.

The firm says that with more than 3.6 million Kiwis on social media each day it makes sense that your business would be there.

Share and Newpark Group Join Forces

Share and Newpark Group are joining forces to create an advice network of more than 500 advisers across all facets of financial services including insurance, mortgages, KiwiSaver, and investment planning.

Share's Chair Richard Thomas says he understands advisers want to maintain their autonomy and that the new organisation will offer several business models advisers could choose to operate under.

Shanks

And in an opinion piece, Financial Advice NZ's Katrina Shanks reminds advisers that the 15 March cut-off date is fast approaching and that those without a transitional licence cannot offer advice from that date. The FMA will not entertain any exceptions, she says.

Gold Awards For AIA And Southern Cross

Reader’s Digest has named AIA and Southern Cross Health Insurance among its annual customer service awards winners.

Southern Cross Health Insurance won gold in the annual contest's health category and AIA won gold in the life insurance category.

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The FMA has released its final standard conditions for a full Financial Advice Provider (FAP) licence and dropped its proposed requirement for advisers to have professional indemnity insurance following industry lobbying.

However, the regulator says professional indemnity insurance is an important decision for financial advisers.

Katrina Shanks, CEO of Financial Advice NZ welcomed the decision saying her organisation had asked for professional indemnity insurance to be removed from the final standard conditions saying there were questions over its availability and affordability in the future.

Event

Financial Advice NZ is holding an event with the FMA on Tuesday November 17 where details of the regulator's guide to applying for a FAP licence will be discussed.

The event, to be held at the Christchurch Town Hall starting at 3.15pm, will also be streamed live.

FSC

The Financial Services Council has released a guide to help financial advisers understand changes to disclosure requirements that apply from 15 March next year.

Richard Klipin, CEO of the council, says the guide provides examples of the new disclosure requirements through different advice scenarios and gives examples of wording that could be used by advisers when meeting clients.

FMA

Following the FMA's proposal to recognise Australian adviser qualifications we asked if you supported the idea.

Voting in our poll currently shows that 62 per cent of you say 'no', 23 per cent are 'not sure' and 15 per cent of you say 'yes'.

The FMA is keen to hear what you think during its consultation period that closes on 20 November.

Southern Cross

A virtual GP service is being offered by Southern Cross Health Insurance in conjunction with ProCare for patients who need advice when their normal doctor is not available.

Patients can make an appointments using the CareHQ app or the Southern Cross Health Insurance app between 7am and 7pm seven days a week. The consultation fee may be reduced or free for Southern Cross members with GP consult cover.

Fred

Fred Dodds, who enjoyed a career in the financial services industry spanning more than 40 years, passed away on Monday following a battle with cancer.

Last year he was presented with the Service to the Profession award at the Financial Advice NZ annual conference by the organisation’s CEO Katrina Shanks.

Shanks says Fred, who was 74, will be remembered as someone who had significant knowledge of all things related to financial advice and as a facilitator to bring people together.

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There's too many firms selling medical and life insurance in New Zealand says a former Fidelity Life executive. Speaking during the FSC's Generations conference last week Financial Services Executive Don Allerston said the New Zealand market is over-saturated with 17 medical and life insurance companies operating in the country.

He also pointed to industry competitors such as Amazon, which is now selling insurance in India. See this week's poll question.

Consumers Better Off With Financial Advice

New Zealanders who receive professional financial advice are better prepared for the future than those who don’t, according to a report published by Financial Advice NZ.

Its Trust In Advice survey also shows financial advisers are seen as trusted professionals by 93% of consumers who have consulted one.

Trusted Adviser Mark Open For Applications

Members of Financial Advice NZ can now apply for its Trusted Adviser quality mark. The mark is awarded to financial advisers who can show they have committed to continuing professional development at a level higher than that required by the regulator.

General Insurance Training Course

A general insurance training course for financial advisers has been launched by Strategi Institute to help provide advisers with the competence, knowledge, and skill to meet the requirements of the new advice regime. The firm's David Greenslade says it is the only NZQA Category 1 training provider offering the course.

Covid-19 Knocks Kiwi’s Financial Confidence

New Zealanders are increasingly pessimistic about their financial position as a result of Covid-19, according to a report released by Cigna New Zealand.

Its Covid-19 Global Impact Study reveals that half those surveyed are worried about their ability to cope if they lose their job. Among the survey's results are that 34 per cent said they were in a fair or poor situation in January, but by August that had risen to 41 per cent.

Two Independent Directors Appointed to FANZ Board

Former Act Party MP Heather Roy and financial literacy specialist David Kneebone have joined the board of Financial Advice NZ as independent directors for terms of 3 and 2 years respectively. In addition, Cecilia Farrow has been re-elected as the organisation's Risk Practitioner Director.

In total, 63 people applied for the Independent Director positions and five financial advisers applied for the Risk Practitioner Director role.

Fidelity Life Posts Annual Profit Increase

Fidelity Life's full year underlying profit rose by $6m to $17m according to its 2020 annual report. Helping the firm was a lift in net premium revenue to $158m and a drop in operating expenses. Claims paid to customers increased from $125m in 2019 to $139m in 2020. Chief Financial Officer and joint acting CEO Simon Pennington says the results are encouraging given the challenging environment.

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Asteron Life has raised its upfront commission rate to 190% and topped it up with a temporary 10% to offer financial advisers a 200% commission rate.

The firm’s Graham Hill, executive manager Life Distribution says the changes will help to support the business and the industry to remain sustainable for the long term.

Asteron Life says this will be reviewed at the end of June 2021.

Nib

Health insurer nib is extending some of its member support packages, first introduced in April, until the end of the year due to the ongoing Covid-19 situation.

The firm is also offering two-months’ free cover for new clients signing up for selected healthcare policies using its nibAPPLY system by 31 January 2021.

Private

More public-private health partnerships are the key to delivering a more sustainable health system for New Zealanders, says Rob Hennin, CEO of health insurer nib.

He says sweeping changes were recommended in a recent Health and Disability System Review, and how the next government responds to those will set the direction for the country’s healthcare system.

Hennin says more services can be delivered at home or in the community, in partnership with private providers.

Southern Cross

Southern Cross is partnering with the Pause Breathe Smile charitable trust and the Mental Health Foundation to promote a programme that provides children with the tools to navigate life’s ups and downs.

Pause Breathe Smile is a locally developed and internationally recognised mindfulness-based wellbeing programme offered to schools free of charge.

Cygnus Law

Cygnus Law has published a guide to help financial advisers understand their obligations under the disclosure rules that will apply from 15 March next year.

The Auckland-based company says the new regulations do not require that particular records of disclosure be kept, but recommends financial advisers retain relevant documents or other evidence that the required information was provided to clients.

Download the full report at RiskInfo NZ co nz

Poll

The current poll running at RiskInfoNZ asks if you are considering the introduction of a 'fee-for-service' component for new clients?

Poll results so far show that 65% of you say no, 25% say yes, and 10% aren't sure.

There's still time to cast your vote at RiskInfoNZ.co.nz

Mosh

Auckland social media marketing firm Mosh has released a report to help SMEs build their brand via Facebook and Instagram.

Mosh's Julian Thompson says Facebook is the most important social media platform for businesses and says business owner should create a Page on the platform to promote their business.

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Compliance Refinery

Steve Burgess, CEO of the Compliance Refinery, has worked with financial adviser businesses for more than 15 years and in a special opinion column for RiskInfoNZ covers off the various stages advisers should now be at as they prepare for the incoming regime. He says advisers should either be in a FAP, creating their own FAP, or be preparing to exit the industry.

Read what he has to say at riskinfonz.co.nz

Poll result

The issue of managing conflicts of interest appear to be well in hand among most of those who have voted in our current poll.

Last week we asked if you have any concerns about meeting your future conflict of interest obligations.

The results so far show that 85% of you have no concerns, 12% are concerned and 3% are not sure.

The Adviser Platform

The Adviser Platform has launched a training and development academy to help support business owners recruiting new advisers.

Ryan Edwards, the company's Managing Director, says his academy – which will welcome its first intake in February next year – will help firms wanting to take the next step and bring on new advisers.

Suncorp New Zealand

Suncorp New Zealand has appointed Grant Willis to the newly established Head of Life role.

Willis, who was previously the firm’s Executive Manager – Life, will oversee the core functions of Asteron Life, including sales, operations, product, pricing, claims and client servicing.

Partners Life

Partners Life is running a three-day online training course for advisers who have worked in the industry for less than 24 months on October 19, 20 and 21. Advisers will need the approval of a Partners Life agency to take part.

Financial Markets Authority

A Financial Markets Authority (FMA) report on its supervision activities over the past 18 months says large parts of the financial services sector are working hard to meet its expectations, but expects to see more widespread improvements to governance and compliance.

Rob Everett, the FMA's CEO, says some of the issues identified in its monitoring were concerning and he anticipated the regulator would take increasingly strong action where deficiencies are not remedied appropriately or in a timely manner.

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This week financial advisers were given a vote of thanks by the FMA for helping their clients through the Covid-19 alert levels.

Speaking during Financial Advice NZ’s Bounce conference John Botica, the regulator’s Director of Market Engagement, told an online audience of 385 industry players that he knows the past six months haven't been easy for advisers or their clients.

Based on the number of applications for transitional licenses the FMA says about 2,000 financial advisers yet to apply. They were urged to get their applications in before the summer holidays start. From 15 March next year advisers with a transitional licence will have two years to apply for a full licence.

Nib

Health insurance firm nib has raised premiums by an average 9.7% on the back of the rising cost of claims.

Quotations dated before 1 October 2020 will be honoured if the application goes into force within 30 days of the quotation date.

Trust

The biggest issue facing anyone working in sales is trust, says David Horsager, a global trust expert and CEO of the US-based Trust Edge Leadership Institute.

He says the only reason customers buy from a salesperson, unless it’s a commodity, is trust. Read the full story at riskinfonz.co.nz

Conflicts of interest

Mitigating and managing conflicts of interest is a key element of the new disclosure requirements, says Katrina Shanks, CEO of Financial Advice NZ. In an opinion piece for Risk Info NZ she explains how advisers can spot potential conflicts saying effective management of conflicts of interest has been a key consideration for the policy makers.

Southern Cross

Southern Cross Health Society Group, which returned $50 million to its members this year, posted a surplus of $32.4 million for the year ended 30 June 2020.

In the last financial year, the society paid $972 million in claims and received $1.138 billion in premiums.

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Leveraging Social Media to Grow Your Advice Business

Lifestyle content shared by financial advisers on social media rates the highest among their followers, according to a US study that challenges the traditional marketing narrative.

Tara Clark, founder of a Vancouver-based social media agency, recommends advisers use LinkedIn to increase engagement with clients, build brand awareness, and generate leads.

She says advisers should create a content calendar based on your audience’s needs and wants.

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Strong Reminder To Advisers On Client Obligations

Treating clients fairly and ensuring they understand what's being signed were among the key take-aways of a presentation by the Insurance & Financial Services Ombudsman

Karen Stevens heads-up the organisation that provides dispute resolution services for consumers with complaints about their financial services provider.

She says fairness is in the eye of the beholder and that the new regulatory regime is more about demonstrating and showing that you comply than it has been previously.

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The SME market should be on the radar of financial advisers as 20% of small business owners who buy life insurance direct would likely use a financial adviser if they knew one, says Asteron Life

Research completed by the firm reveals that cultivating referrals and strong word of mouth is the best path to attract new customers, with half of its survey's respondents saying they would ask a friend, colleague, or family member for a recommendation of an adviser.

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Strategi‘s Head of Risk and Compliance says every adviser planning to remain in the industry should ask themselves some important questions so they understand their legal status as a financial adviser.

He also says changes to the advice process need to be recognised, understood and prepared for.

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The Reserve Bank of New Zealand will relaunch its review of the Insurance (Prudential Supervision) Act in October. The review began in 2017, was due to resume in March, but was delayed because of Covid-19.

The bank’s Deputy Governor and General Manager of Financial Stability Geoff Bascand made the announcement during a speech to the Insurance Council in Wellington on Monday 14 September. He said a policy paper outlining the resumption of the review will be published in early October.

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Cigna is offering multi-benefit discounts on selected products that provide premium discounts of up to 7% when clients buy at least $200,000 of life cover and one or more additional qualifying benefits.

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Moving from a commission structure for financial advisers to a user-pays model “...could significantly reduce access to insurance advice for customers”, says an independent report on New Zealand's life insurance sector.

Authors of the Deloitte report also say changing the way advisers are remunerated has the potential to further exacerbate the underinsurance issue in new Zealand.

Client surveys

Financial advisers working with Partners Life should encourage their clients to take part in the insurer's customer care surveys, says Andries van Graan the firm's General Manager Adviser Distribution.

The survey is part of the company's Customer Outcomes Matrix and has been designed to help support the company and advisers if a complaint is made, as well as award points to advisers.

Best Doctors

Asteron Life's disability insurance customers now have access to the Best Doctors service at no extra cost.

The service provides the company's policyholders and their immediate family with access to psychologists and psychiatrists in addition to online consultations with GPs.

Client care

If your goal is to foster client relationships and enhance the life-time value of your clients, Canadian Michael Morrow, a recognised expert in fostering client loyalty, has a few ideas. He sends care packages and personalised gifts to clients.

When it comes to client care and relations he says “You can’t play small with your decisions and big with your income”.

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In an exclusive column published by Risk Info NZ Shanks covers off …

1. New regime and licensing pathways
2. Qualification and competence during the two-year competency safe harbour period
3. Disclosure obligations - as outlined by the Government in June
4. Privacy Act 2020 (coming into force on 1 December 2020)

Webinar

Financial Advice NZ will provide a snapshot of the wealth aspirations of Kiwis during a webinar with Rhiannon McKinnon of Kiwi Wealth on Wednesday 2 September at 10am.

McKinnon says her State of the Investor Nation report will provide a comprehensive understanding of Kiwis’ perceptions of their own wealth and confidence both before the country first went into lockdown and then after the country re-opened at Alert level 1.

See financialadvice.nz for details.

The number of transitional licences under assessment or issued by the FMA currently stands at 1,050. This represents an estimated 7,166 financial advisers and 8,893 nominated representatives.

The new regulatory regime starts on 15 March 2021 and advisers are encouraged by the FMA to apply for their licence as soon as possible.

Ryan Edwards, Managing Director of The Adviser Platform, says while financial advisers are aware of the incoming regulatory regime, few fully comprehend the impact it will have on their day-to-day practice.

He says that while the new regime brings an exciting opportunity for all professional advisers, they will require a level of resourcing, in terms of time and expertise, that many neither have, nor can afford.

And onto our current poll where we are asking about appointment scheduling...

So far, 65% of make your own appointments with clients; 23% rely on a team member to call clients and 12% of you share the work or do it yourself.

There's still time to cast your vote....

Dignity

Speaking during August's MDRT 2020 Virtual Event American financial adviser Shane Westhoelter told online viewers that advisers are providing dignity to their customers.

The CEO of US-based Gateway Financial Advisors says dignity – not insurance – is what he has focused on for the last 30 years.

When advisers provide dignity and stop selling products, people will refer family and friends to them, he says.

Find out more and keep up to date at RiskInfoNZ.co.nz

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Peter Taylor said he couldn't return the money having spent it on luxury cars and a holiday home.

The court said Taylor did not meet the insurer's definition of totally disabled and had earned too much money to qualify for payments under the policy.

Assistance

Asteron Life

Asteron Life, a division of Suncorp New Zealand, delivered an after tax profit of $40 million for the year to 30 June 2020 – down $4 million on its 2019 figure. The company has provided more than $3 million in Covid-19-related premium waivers that customers do not need to pay.

Meanwhile, Suncorp NZ announced an after tax profit of $259 million for the same period, down slightly on its 2019 result of $261 million.

Free marketing advice

Financial advice companies wanting free help with digital marketing may be able to draw on the services of Auckland firm Moberate Technologies.

The company is one of many that's able to accept vouchers issued by the government's Covid-19 Business Recovery Fund which has had $40 million added to its pool by the Regional Business Partner Network.

Nib annual result

Nib New Zealand's operating performance for the 12 months to 30 June shows a rise in membership, revenue, and earnings.

The company's premium revenue grew more than 10% to $253 million, its underwriting result was almost $26 million, up 11% on last year, and membership increased from 213,000 in 2019 to 227,000 today.

Community grants paid

AIA New Zealand has given away $500,000 in grants to good causes across New Zealand via its Vitality Business and Community Grant Initiative.

The company invited applications for the grant in June; asking financial advisers and community groups to make submissions for one of 10 grants each worth $50,000.

The company says the money will be used to fund programmes, many already up and running, that it says will make a positive difference to the health and wellbeing of local communities.

Orphan clients

Adviser Ratings estimates billion of dollars of advised wealth was in transition in Australia due to advisers exiting the industry. It says advisers are streamlining their client books for financial survival while others are leaving the industry and contributing to a growing pool of client “orphans”.

Student helped

Cigna New Zealand has awarded 21-year-old Victoria University of Wellington student Sabrina He with a scholarship worth $5,000.

The scholarship will help toward the ex-Hutt Valley High School student’s university fees and a summer internship working in the Cigna actuarial team.

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So far it has helped 4,800 customers with premium holidays, paid out more than $500,000 to policyholders whose policies were on a premium holiday, and paid financial advisers $500,000 in commission payments for policies that were operating under a payment holiday.

The majority of financial advisers are finding it harder to place new business with insurers as a result of the Covid-19 pandemic according to the latest Risk Info NZ poll.

Of the votes cast so far; 61% of you agree it is more challenging to have new policies accepted, 32% appear to be placing business as normal, and 7% are unsure if there has been any change.

Insurance broker Aon is partnering with online wills and financial literacy provider Footprint to offer a free will service to corporate clients.

Aon says it is the first company in the sector to provide and cover the cost of wills to clients with a life insurance policy through employee benefits – potentially saving employees an average $5,000 in estate administration fees.

The Bounce conferences being organised and hosted by Financial Advice NZ are going ahead in September, despite Covid-19 alert levels.

The organisation’s CEO Katrina Shanks says the four events, in Auckland, Wellington, Christchurch and Dunedin, have been designed so they can be delivered online “so we continue regardless of the Covid-19 alert levels”.

Speaking at the MDRT 2020 Global Conference, financial adviser and professional speaker Sol Hicks told a global audience that what those working in the insurance sector offer consumers is a bridge over troubled financial waters.

He says families want to feel secure and that those who want to continue working in the business should never forget it.

High-net-worth Australians panicked by the spread of Covid-19 are buying life insurance. However, trust in insurance providers remains low, says data and analytics company GlobalData.

The company's 2020 Global Wealth Managers Survey shows the pandemic is driving demand for life insurance products with 88 per cent of wealth managers reporting increased demand for life products – the highest proportion among the 19 countries surveyed by the firm.

David Whyte, Managing Director of DCW Management, says in an opinion piece that early adopters of the incoming regulatory regime will find it less of a challenge when it arrives in March next year.

He says that to defer or delay implementation of an agreed strategy runs the risk of the unexpected occurring and that balancing operational activity with strategic implementation is an investment that will pay dividends.

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Insurers are taking a cautious approach to new business in the Covid-19 environment, says a report by advisory, broking and solutions company Willis Towers Watson.

Its 2020 Insurance Market Update says that while New Zealand has been relatively unscathed by the pandemic from a risk benefits insurance perspective, insurers operating in the group life, income protection, and trauma markets are nervous.

The report's authors write that economic impacts are likely to continue to lead to restructuring of business leading to job losses.

Fidelity Life

The insurance industry is suffering from low consumer trust, with both regulators and customers demanding better outcomes, says Dan Wilkinson, Fidelity Life's chief technology officer.

He says the firms $25 million computer upgrade will not only help the firm survive but improve consumer trust and help advisers with better data.

And the Fidelity Life board has appointed financial services specialist Mel Hewitson as an independent Director.

Her appointment follows that of Nicola Greer in May. The two appointments fill the vacancies created by Carole Durbin and Anne Blackburn.

Talking of movers and shakers...

Blair Vernon has left his role as CEO, AMP New Zealand Wealth Management (NZWM), to join AMP Australia as its Acting CEO. He replaces the firm's former CEO Alex Wade who resigned.

Jeff Ruscoe will replace Vernon as Acting CEO, NZWM.

Financial Advice NZ

Guest columnist Katrina Shanks, CEO of Financial Advice NZ, writes this week that the incoming regulatory regime – which start on 15 March next year – is an opportunity for advisers to lift disclosure from being a compliance driven obligation to an integral part of the client communication journey.

However, her organisation is pushing for changes to the Financial Markets Amendment Bill before it becomes law.

The organisation is concerned financial institutions have to consider training and supervising financial advisers. The bill will have its second reading after the September General Election.

Digital Devices Offer strategic Insight To Customers

The development of data-driven business models is impacting the entire insurance value chain, says the Swiss Re Institute.

Its report, Data-driven insurance: ready for the next frontier?, says internet-enabled devices have changed consumer behaviours and expectations, particularly among younger generations.

“As a result of digitalisation, insurers now have direct connection to their customers,” says the firm.

MDRT Global Conference

Speaking at the MDRT Global Conference last week was Todd Fithian, a US-based adviser and co-author of The Right Side of the Table: Where Do you Sit in the Minds of the Affluent?

He told viewers of the online event there are three things that are critical for advisers...

1. Define your niche and market to it
2. Embrace your “fiduciary” duty
3. Develop the one skill that will competitor-proof your business

These disciplines will allow you to make the shift to a business that balances the qualitative with the quantitative and become an evolutionary adviser, he says.

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This year the conference is called Bounce and is being held at 4 location across New Zealand from September 21 – with all events also being broadcast online.

Among the keynote speakers are Keith Abraham, Erik Qualman and political economist Dr Angus Hervey. Tickets are available now.

Melanie Purdey

Melanie Purdey has been appointed Head of Aligned Advice at AIA New Zealand and will report to Sam Tremethick, the company's Chief Partnership Insurance Officer.

She was previously CEO at Newpark Group, a role she left in March.

Fidelity Life

Fidelity Life has completed the first phase of a $25 million technology upgrade with the migration of 3,000 policies to a Microsoft cloud platform.

Fidelity Life's Chief Technology Officer Dan Wilkinson says the updates will help the firm build trust and ensure the business remains in a strong position.

The second and final part of the update is underway now and Wilkinson says the firm's transformation strategy is planned out until 2025.

White paper

The regulatory framework firmly places the onus on financial advice providers to meet client needs and deliver good outcomes for vulnerable clients, concludes a white paper released by training company Strategi.

According to the report, which lists some of the traits advisers should be looking for to identify vulnerable clients, one in four people face literacy difficulties, one in six can be diagnosed with a common mental disorder, and 10% of all people aged over 65 will experience some form of elder abuse.

“So having robust practices, processes and policies in place is essential,” says Strategi.

Poll

Perhaps it is too early in the year to tell but it seems a fifth of advisers have been hit hard by Covid-19 and are yet to start turning the tide on the downturn their business faced during lockdown.

Last week we asked “Are you and your business back to operating at pre-Covid-19 levels?”.

Of those who have so far taken part in our latest survey 42% voted 'yes', 36% say they are 'getting there' and 21% say their business is still below pre-covid levels.

Cigna

21-year-old Victoria University of Wellington student Sabrina He has been awarded the 2020 Cigna Actuarial scholarship valued at $5,000 for her university fees and a summer internship working in the Cigna actuarial team.

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Katrina Shanks, CEO of Financial Advice NZ, says there is no doubt financial advisers’ revenue was reduced during the Level 4 lockdown, but that today they are just getting on with business as normal.

Read our special report – Mood of the Financial Adviser Nation - at riskinfonz.co.nz

FMA Returns

Among the FMA’s priorities for the next six months include monitoring the changing regulatory risks as the Covid-19 pandemic plays out across New Zealand and around the world.

In an announcement, the regulator expects the pandemic to continue to have a significant impact on the economy, financial advice sectors, and consumers.

However, it appears its softly, softly approach is being replaced with a business as usual approach.

The FMA says it has resumed its supervisory monitoring programme, which includes planned, reactive and thematic monitoring of licenced operators.

New regime

Lawyers at Buddle Findlay have run the ruler over the incoming regulatory regime and comments on how different it will be to the current system.

The company says that while the new disclosure regime aims to make disclosures available as-and-when they are “most appropriate” to the client “…the timing and content of each of those disclosures reflects a stated purpose”.

In addition there's a reminder that AFAs will not be required to submit their annual information returns this year thanks to a concession by the FMA.

Free training

Partners Life is planning a three-day training course for advisers who have worked in the industry for less than 24 months.

The company’s New Adviser course is free and being held on August 17, 18 and 19 at the company’s offices in Takapuna, Auckland. But you'll need to apply today Wednesday 29 July.

Money week

Money Week is being held from August 10 to 16 and this year’s theme is ‘Just wondering’.

The annual event is organised by Sorted, a part of the government’s Commission for Financial Capability.

Partners Life reverses restrictions

Partners Life has reversed its restriction on waiting periods for self-employed clients in response to adviser feedback.

The company announced the change on Thursday July 23 telling advisers they are “…free to recommend the best waiting period option for your customer, irrespective of their employment status”.

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An FMA spokesperson says there's no specific financial value threshold for disclosing gifts and that advisers need to consider what would be reasonable and provide appropriate levels of clarity.

Advisers, says the FMA, already have an obligation to “…exercise care, diligence and skill and not act in a way that is misleading, deceptive or confusing”.

Poll question

In this week's poll we ask if advisers should be required to disclose all soft dollar incentives they receive?

Cigna Limits

Cigna New Zealand is making it easier for clients to get medical cover, having changed its non-medical limits for its Assurance Extra and Business Assurance product suites.

The company’s CEO Gail Costa says the changes will make it easier for customers to get cover without having to undergo medical tests. The new limits are active now and will also be applied to new business currently in underwriting.

Tick-box disclosure

The days of financial advisers handing over a disclosure form and ticking a box will be over, come 15 March next year.

Under the new regime, disclosure becomes less of a formality for advisers and more of a customised exercise.

Sharon Corbett of MBIE says the new regime is not about having a single statement. It's about the adviser handing clients information that's relevant to the service they are providing.

Trusted Adviser

Consultation over the criteria for obtaining the Trusted Adviser mark from Financial Advice NZ continues with seasoned advisers hoping their decades of experience will be taken into account in lieu of holding a Level 5 qualification – something that is mandatory for a FAP licence.

Business insurance

Research by Vero Insurance shows nearly two thirds of New Zealand’s SMEs want insurance advice as a result of the Covid-19 crisis.

According to its survey, business owners want to know what types of insurance would benefit their business and how to defer or adjust insurance premium payments.

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Lawyers at Dentons Kensington Swan are questioning the A, B, C class system for financial advisers proposed by the FMA.

They say consumers could be confused by the system thinking someone with a class 'A' licence is somehow better than someone with a 'B' or 'C' licence. They suggest the licences be called: single adviser licence; a multi-adviser licence; and an unrestricted or comprehensive licence.

The FMA is partway through its consultation on the incoming regulatory regime that starts in March 2021. Anyone wanting to have their say can make a submission to the FMA by 7 August.

Fidelity Life

Fidelity Life's Craig Winterburn, the firm's General Manager Distribution, is now working at Share, a New Zealand-based network of financial advisers, as its National Network Development Manager.

Webinar

Financial Advice NZ is holding a webinar at 10am Wednesday 8 July where its CEO Katrina Shanks will outline the organisation’s proposal for its Trusted Adviser accreditation and its criteria.

Shanks says the Trusted Adviser mark will distinguish advisers who have chosen to commit to qualifications and ongoing professional development at a level higher than that required by New Zealand law and code.

Latest Poll

More financial advisers are planning to operate under their own transitional licence than 10 months ago according to our latest poll.

In October 2019, 68% of those who cast a vote in our poll said they would work under their own licence. But today that figure has risen to 83%. There's still time to cast your vote and see the full results.

Statement of Intent

The FMA's Statement of Intent, released last week provides a comprehensive overview of its expectations from those working across the sector, and includes its definition of what it believes is fair when it comes to how consumers should be treated.

The regulator says it expects all market participants to act fairly and professionally, and be committed to pursuing the objectives and spirit of regulation rather than just the letter of the law.

Suncorp New Zealand

Suncorp New Zealand CEO Paul Smeaton is leaving the New Zealand operation to take up a newly-created role as its Chief Operating Officer – Insurance in Brisbane.

The company’s New Zealand Chief Financial Officer Jimmy Higgins will step in as Acting CEO while the recruitment of a successor for Smeaton is undertaken. Smeaton’s new role takes effect on 20 July 2020.

Privacy Bill

With the revised Privacy Bill due to become law on 1 December 2020 specialist privacy lawyers at Dentons Kensington Swan have drawn up a list to help business owners prepare for the incoming changes.

Their first recommendation is that business owners develop a plan to manage any breaches of data, as business will be expected to comply with the notifiable privacy breach regime.

The firm says that while breaches can be difficult to predict, your response shouldn’t be. Now is the time, they say, to create a plan about how your business will assess, contain, and respond to breaches in a way that complies with the new act.

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The organisation's CEO Katrina Shanks says that once the Trusted Adviser criteria is approved it will be available for qualifying members to use in the promotion of themselves to the public.

Shanks says the Trusted Adviser mark is intended to be aspirational and if adopted will make it easier for the public to seek out quality financial advice.

She says it will create a pathway to a recognised mark for those who are seeking to further develop their professional skills and knowledge.

Simpler products

Insurers should look at providing simpler products that could be cheaper for consumers who face reduced household income due to Covid-19’s impact on the economy.

That’s the view of Lee-Ann du Toit, a Partner in the Actuarial and Insurance Services team at Deloitte in Wellington. She says insurers should explore how they can support both customers and businesses to ensure that people remain covered.

Partners Life

Nadine Tereora is to join Partners Life as its chief operations officer next year.

The former Fidelity Life CEO, who resigned her job in May, says she wants to join an organisation that demonstrates strong commitment to the life insurance industry and is serious about doing the right thing by its customers, advisers and staff.

Partner’s Life founder and MD Naomi Ballantyne says Tereora will support her as she focuses on the company’s strategy, reputation, and shareholder engagement “while continuing to help shape the future of the industry”.

FSC Conferences

Two of the keynote speakers confirmed for the Financial Services Council’s annual conference on 9-10 September are Minister of Finance Grant Robertson and Paul Goldsmith, opposition spokesperson for finance.

The conference is being held at the Pullman Hotel, Auckland, and tickets are on sale now.

New advice regime

MBIE says the start of the new financial advice regime will be 15 March 2021. The impact of Covid-19 meant the introduction was delayed from the planned start on 29 June.

Meanwhile, The FMA is encouraging financial advisers to apply for their transitional licences by the end of the year. The FMA had so far granted 850 transitional licenses, representing an estimated 6,500 financial advisers.

AMP Life

The sale of AMP Life to Bermuda-based Resolution Life has called into question the rules that apply to such transactions.

The transfer of the insurance business was given the blessing of the Reserve Bank of New Zealand last week following 18-months of negotiations.

But a petition calling for an urgent review of the law that applies to these types of business transfers will be heard today – Wednesday July 1

Andrew Body, an AMP Life policyholder and investment banker, will speak before a government finance and expenditure select committee to air his concerns.

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The trust, says the bank, will hold capital and assets in New Zealand to help provide long-term security for insurance policyholder benefits or investments.

The board of Resolution Life NZ will have a majority of New Zealand resident, independent directors.

AMP says the sale will complete on 30 June 2020.

AMP, which is to retain its Wealth Management business, will provide an update to the market on 1 July 2020.

FAP Licence

Compliance and consulting services company Strategi has published its view of the FMA’s proposed FAP licencing regime and says the cost of being a FAP may not be too different from joining someone else’s.

In reviewing the FMA’s consultation paper, Strategi says the three classes of licence from the regulator enable businesses of all sizes to hold a FAP licence.

The FMA last week proposed three classes of licence for financial advisers – A, B and C – depending on the adviser, the scope of advice they wanted to provide, and if they employed financial advisers.

The FMA is looking for feedback on its proposal by 7 August 2020.

Transitional Licences

The FMA says the total number of transitional licences approved or under assessment by the regulator stands at 846.

682 licence applications have been received from companies based in the North Island, and 164 from the South Island.

An FMA spokesman says anyone planning to apply for a transitional licence should do so sooner rather than later.

Poll result

In last week's RiskInfo poll we asked if you are already documenting the advice you are giving clients – ahead of the incoming regulatory changes next year.

Of the votes cast so far; 86% of you are already documenting your advice, 7% are not and 7% say they are not sure.

Webinars

There are three webinars of interest coming up.

Today at 10am Financial Advice NZ is hosting a webinar with insurance broker and risk adviser Marsh to explore the firm’s liability insurance programme.

On Friday afternoon June 26 the Financial Services Council is holding part three of its fortnightly Get In Shape series of webinars to discuss how to ensure your business has robust contracts with authorised bodies, advisers, suppliers and staff.

And on Tuesday June 30 Customer service and complaints procedures will be the key topic of an FSC webinar with Susan Taylor, CEO of the Financial Services Complaints company.

SME Insurance

A survey of 600 SMEs by insurer Vero shows that 20% of business owners are looking to increase their insurance cover as a result of Covid-19. However, 10% are thinking about reducing their cover.

The insurer says it will use the survey’s findings to work with brokers and advisers to help them offer what Vero calls “…a compelling proposition to SMEs”.

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He said financial advisers have at least nine months before ‘day one’ of the Financial Markets Conduct act, but they could start meeting the record-keeping requirements now.

“It is no good telling the FMA what a good job you have been doing about complying with all you have to do,” he said. “You need to be able to show them. And that involves record keeping and good evidence.”

Ireland says that come day one, financial advisers will have to be fully compliant. Day one is not the day to start getting up to speed.

FSC Conference

The Financial Services Council is to hold its annual conference in Auckland on 9-10 September at the Pullman Hotel. Tickets are on sale now.

This year’s event is themed Generations, and – says the organisation’s CEO Richard Klipin – will include sub-themes such as wellbeing, sustainability, and guardianship. Klipin says the conference will have a focus on insurance, KiwiSaver, as well as looking at the world of technology.

Underinsurance

And a survey of 2,000 Kiwis commissioned by the Financial Services Council found that just 38% had any life insurance. With the average amount of cover being around $170,000.

Richard Klipin, CEO of the Financial Services Council, says the research found a strong link between money and wellbeing with money worries causing stress for most New Zealanders.

No more funeral cover

Partners Life has stopped offering funeral cover with immediate effect. It announced its decision on Monday 15 June 2020.

In a statement, the company says that in the recent Life Insurer Conduct and Culture review from the FMA and RBNZ, guaranteed acceptance products such as funeral cover were highlighted as a potential area of poor customer outcomes.

This, says the insurer, is due to the relatively high premiums, often limited benefits, and the possibility of misunderstanding of coverage and eligibility.

Health insurer Nib New Zealand is offering its Covid-19 support package for an additional three months to 30 September 2020.

The firm's CEO, Rob Hennin, says that while lockdown restrictions have eased and more healthcare services are now available, the pandemic will continue to have ongoing financial and health impacts on New Zealanders.

Hennin says many of the company's members have experienced financial uncertainty and additional stress as a result of Covid-19.

Financial abuse

A new accreditation has been launched for advisers wanting greater skills and competency when helping clients exposed to financial abuse.

It has been developed by UK firm Standards International and is being managed by best practice specialist Michelle Hoskin in conjunction with Australian adviser Amanda Cassar.

The online course is designed to educate advisers about elder abuse and the warning signs of financial abuse.

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Insurance firms and industry bodies say proposed changes to the Financial Markets Amendment bill are confusing and need to be changed before becoming before being made law.

More than 50 submissions have been lodged with the select committee charged with looking at the changes – its first meeting is today – Wednesday 10 June.

Among those calling for more time is Katrina Shanks, CEO of Financial Advice NZ. She says the the bill should be suspended for the foreseeable future to allow the sector overcome the impact of Covid-19.

A view echoed by Richard Klipin of the Financial Services Council, who says the bill has not been well thought through and that a number of important aspects of the bill lack detail and clarity.

Poll Result

Last week we asked if you are happy with the way insurance firms have responded to the Covid-19 crisis.

We reported that a range of initiatives have been introduced across the sector to help both advisers and consumers, ranging from higher commission rates to a relaxation of the restrictions placed on some products by insurers.

Based on the way you voted, it seems insurance companies could be doing more to help.

Of the votes cast so far; 50% of you are satisfied in how insurance firms has responded; 27% are not happy and 23% say they are not sure.

Cancelled conference

Financial Advice NZ has cancelled its 2020 conference which was to be held in Christchurch. It will instead hold four virtual conference in September.

The organisation’s CEO Katrina Shanks says each region will host a webinar that members can attend or watch live online.

Financial Advice NZ's AGM will be held on 13 October in Auckland.

Mental Health

A report by Deloitte says that while New Zealand’s life and health insurers are unlikely to face a wave of Covid-19 related claims, the stress of job loss has yet to take its toll on the sector.

Shami Shearer, the firm's Director, Actuarial & Insurance Services, says we’re likely to see an increase in mental health claims as business owners strive to keep their businesses afloat while employees suffer from reduced job security and, in some cases, reduced pay.

AI

The AI For Financial Insurance Services report details how artificial intelligence (AI) is helping the insurance sector by automating processes and reducing the costs of regulatory compliance.

The report says AI will be “…critical to the insurance industry’s reinvention” and concludes that AI has moved into the global insurance sector and New Zealand organisations need to pay attention.

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Life insurer Fidelity Life announced the resignation of its CEO Nadine Tereora last week. The Fidelity Life’s Board will start searching for a new CEO immediately.

Chief Distribution Officer Adrian Riminton and Chief Financial Officer Simon Pennington have been appointed as joint acting CEOs as this is Tereora’s last week at the firm.

Bonus commission

Bonus commission rates of up to 40% will be paid to financial advisers selling AIA New Zealand’s Living products until September.

The company had already increased its basic initial commission on Living products from 10% to 20% to promote use of its eApp and online quoting tool.

But its Small Business Support Package adds a further 20% commission for Living products.

Restrictions lifted

Partners Life has lifted many of the temporary underwriting restrictions to disability products it imposed as a result of Covid-19 on March 24.

At the time it also introduced a stand-down period for all new policies; requiring six months of premiums to be paid before eligibility for benefits such as Premium Holiday and Policy Suspension would arise.

Those restriction have now been removed.

Partners Life appointment

Partners Life Group appointed Shelley Ruha as an Independent Director of Partners Life on 14 May but only made the announcement last week.

In a media statement the company says Ruha has extensive governance experience in financial services, fintech, technology infrastructure and payments innovation.

Solvency concerns

Low solvency buffers among some of New Zealand's life insurance companies have been highlighted in the RBNZ's Financial Stability report.

It says some insurers have been adversely affected by falling interest rates and that in the past six months it has applied licence conditions to some insurers requiring them to have stronger capital buffers and to mitigate the impacts of further cuts to interest rates.

The report avoids naming any of country’s 90 licensed insurance firms it is advising.

Investment standards

AIA Group has adopted the Global Investment Performance Standards saying it is the first asset owner to achieve compliance with the standard in the Asia-Pacific region.

The GIPS standards provide an ethical framework for the calculation and presentation of investment performance for investment management firms and asset owners.

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Two FAP support service companies have been launched by Cecilia Farrow, founder of cloud software platform Triplejump. The companies are Financial Advice Provider Services and Thrive Advice.

Farrow says advisers in the life insurance sector are looking for partnerships that will give them leverage and differentiation, whether this is supporting their FAP license or the ability to join a FAP license (Thrive Advice says it will hold a FAP).

Hardship policies

Financial Advice New Zealand has compiled a list of insurance company responses to the financial impact of Covid-19 on its customers.

The PDF, published by Financial Advice NZ says the information is “…a high-level overview of the life insurance companies’ hardship provisions”.

Download at RiskInfoNZ.co.nz

Financial Adviser Help

The Adviser Platform has launched a Claims Committee to help the firm’s adviser partners manage problematic claims.

Scott Duncan, the company's Head of Compliance & Advice, says the committee features experienced advisers with two being former board members of another aggregator.

Poll Result

Our story raising the prospect of insurance company clawbacks after the government's Covid-19-related wage subsidies have ended struck a nerve with financial advisers.

In last week's poll we asked if you are concerned about commission claw-backs. While 8% said they aren't sure, 32% said they're not concerned, but 60% of those who voted admitted it is an issue that worries them.

Our poll is open for another week; so you still have a chance to cast your vote below.

Distance Learning For NZCFS Level 5

Financial advisers wanting to study Version 2 of the New Zealand Certificate in Financial Services (Level 5) via distance learning can enrol at Professional IQ College.

The college is the first NZQA accredited private training establishment to launch Version 2 of the core qualification

Mental Health Help

Health insurer Nib and its charitable entity the Nib Foundation has helped mental health company Clearhead launch Telehealth – an AI chatbot that puts people with concerns about their health in touch with mental health practitioners.

AIA

AIA New Zealand has had its Insurer Financial Strength rating affirmed at ‘AA’ (very strong) by ratings agency Fitch.

AIA Group is the world’s largest life insurance company by market capitalisation. In the 12 months to 31 December 2019, AIA New Zealand paid $476 million in claims.

Financial resilience index

The first in a series of surveys to be commissioned by the Financial Services Council reveals that Covid-19 delivered an unprecedented hit to New Zealanders’ financial resilience and wellbeing.

The Financial Resilience Index reveals that 40% of people are worried about money, 45% of people are not confident about making financial decisions and 51% of New Zealanders have had their mental health affected money matters.

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The issue of adviser commission claw-backs was raised with the Minister of Commerce and Consumer Affairs Kris Faafoi during a webinar hosted by Financial Advice New Zealand this week.

The organisation’s CEO Katrina Shanks is concerned clients will cancel policies to save money – due to the economic impact of Covid-19 – and insurance companies will claw-back payments in the months after government wage subsidies have ended. Leaving advisers without a safety net.

Transitional Licences

The FMA has approved almost 800 transitional licence applications, representing around 5,500 financial advisers, says the regulator.

It says there are around 10,000 financial advisers in New Zealand, and that new applications are being received by the organisation every day.

The Government delayed the start of the new financial advice regime from June until the first half of 2021 as a result of the Covid-19 crisis. A revised start date will be announced later this year.

In June the FMA will begin consultation on the standard conditions for full Financial Advice Provider licences.

Cigna Doubles Commissions

Cigna New Zealand is doubling service commission payments to independent financial advisers in June and July.

The firm's CEO Gail Costa says the company is recognising the additional efforts that its advisers are making to look after their customers during these uncertain times.

Melanie Purdey

Melanie Purdey, who has held a string of senior positions in companies such as Westpac and Newpark Group says while complying with financial industry regulations continue to forge the groundwork of client care – regulation alone is not enough.

She says that over the past few weeks – during Alert Levels 4 and 3 – most advisers have stepped up and understood care from their own perspective in a way that some may have not understood before.

Industry levies to rise

Industry levies for AFAs are to rise from $330-a-year to $380 plus GST for the 2020/21 year as the Crown prepares to reduce its funding from the current 25% to 17% over three years.

The rise in fees, announced as part of the Government’s 2020 Budget, is to help fund industry regulator the FMA following its calls for increased funding due to cost pressures. The organisation’s funding was last reviewed in 2016.

Katrina Shanks, CEO of Financial Advice NZ, says: “While Financial Advice NZ supported increased funding to ensure we have a strong regulator, we are disappointed that almost the full cost of the increase is being borne by the sector.”

Suncorp

Suncorp has appointed Kate Armstrong as an independent director to the boards of Asteron Life, Vero New Zealand Insurance, and Vero Liability Insurance. The appointment became effective May 4, 2020.

Suncorp New Zealand Chair David Flacks says the boards have been reviewing their composition and skills mix since Geoff Ricketts stepped down in December 2019.

Armstrong has served on the board of the Financial Services Council and held roles as Head of Legal for Westpac’s Institutional Bank.

Survey

A survey carried out in the US reveals that 83% of people value emotional intelligence in their financial adviser, saying it is important to building a quality client-adviser relationship.

The report’s writers say emotional know-how is seen as a foundational skill rather than a mark of exceptional work.

The survey was carried out by Harris Poll for Million Dollar Roundtable, an association for financial advisers, with offices in Australia.

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The firm has worked with advisers to build the policy quoting platform which also integrates with Cigna's admin system.

The new platform launched Monday 11 May and any quotes already in the Cigna system will need to be accepted by 11 June 2020.

Partners Life

Partners Life is closing its Covid-19 premium holiday to new claims from Monday 18 May 2020.

The premium holiday was introduced by the firm on 17 March as a result of the government's country-wide Alert Level 4 lockdown.

From Thursday 14 May the country will be under Level 2 – meaning more people can return to work as the country returns to something closer to ‘normal’.

And with the introduction of Alert Level 2, the FMA has issued a comprehensive list of procedures it expects financial advisers to follow should they return to the office to work with their colleagues or visit clients at their homes.

Fidelity Life

Fidelity Life has appointed banking and infrastructure specialist Nicola Greer as an independent director to its board.

Greer’s current governance roles include directorships at South Port, the New Zealand Railways Corporation, and she is a Member of the New Zealand Markets Disciplinary Tribunal.

The Fidelity Life board has seen two departures in the past 18 months; namely Carole Durbin and Anne Blackburn.

Hacker Hits Watchdog

A computer hacker has accessed a staff member’s email account at Financial Services Complaints, says the company.

A statement from the dispute resolution service says it became aware that a “…malicious third party gained access” to a case manager’s work email account. It appears someone guessed the user password of a member of staff.

Cashflow forecaster

MBIE has launched an online cashflow forecaster to help both advisers and their clients.

Simply enter

An MBIE spokesperson recommends advisers use the too now to plan for how the government’s support packages, including the loan guarantee scheme, will affect their cash flow.

Cigna Pricing

Cigna New Zealand has updated a range of policies, including life and trauma cover, with what company CEO Gail Costa calls 'more sustainable pricing' and 'refreshed rates' – although no specific details on pricing were released by the firm.

Cigna is also adopting plain English for its policies.

AMP wealth division

AMP is to retain its New Zealand wealth management business having aborted the sale process.

A company spokesperson said economic and financial markets disruption caused by the Covid-19 pandemic is behind the decision. The division is valued at more than $400 million.

FMA security warning

The FMA says a number of cybersecurity incidents have come to its attention and recommends financial services firms of the importance of reviewing their IT security.

It says firms need to proactively monitor IT systems and electronic mailboxes to identify any unusual activity and ensure they have not been compromised.

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This week RiskInfoNZ looks at how insurance companies are working to build long-term relationships with their customers.

For example, AIA New Zealand is using its ambassadors, including Dame Valerie Adams and Ian Jones, to promote health and wellbeing via a series of TV commercials they recorded at home with their phones.

An AIA spokesperson say the commercials encourage viewers to exercise and practice mindful breathing.

Elsewhere, Fidelity Life carried out a survey of 1,000 of its customers to gauge the state of the nation in a Covid-19 world.

It says during Alert Level 4 those surveyed said they were sleeping more, eating more, drinking more alcohol, and smoking more than before the lockdown – but exercising less.

Read our full report at RiskInfoNZ.co.nz

Raise your profile

Australian business coach and motivational speaker Keith Abraham says financial advisers need to decide what separates them from their colleagues if they want to standout in the market.

Speaking from during a webinar hosted by Financial Advice NZ on Friday 1 May, Abraham asked attendees to decide what they are famous for.

“If you do not know what you are famous for then you have to pick something,” he said.

He suggested advisers raise their profile by writing columns, sharing news with clients and appearing in podcasts.

Poll Result

Last week we asked if you are concerned about the industry regulator’s push to change the way in which advisers are remunerated.

The poll was born out of Partners Life’s defence of current upfront payment arrangements for advisers.

One week after the poll opened, 76% of you are concerned, 22% are not concerned, and 2% are not sure how they feel.

FMA Guidelines

Industry regulator the FMA has issued New Zealand insurers with a set of guidelines it expects them to follow as a result of the ongoing financial impact on consumers due to the Covid-19 pandemic.

Among the recommendations are that insurers should not use the pandemic as a customer acquisition tool and that sufficient training should be offered to advisers on any new Covid-19 policy terms or changes.

The FMA’s Clare Bolingford, the organisation's Director of Banking and Insurance, says the regulator's expectation is that insurers remain cognisant of the challenges faced by New Zealanders and continue to offer support and flexibility to assist policyholders.

Westpac

And finally, Westpac is moving several of its businesses, including its life insurance and wealth platforms, to a new specialist business division.

It will also undertake a strategic review on the best options for these businesses including considering if they would be more successful under different ownership.

Westpac Group CEO, Peter King, says the corporation has several businesses that do not have sufficient scale or where the returns are insufficient for the risk.

These, he says, include retirement products, general and life insurance, and auto finance.

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The insurer says financial advisers are the “good guys” and that the industry regulator's concerns about upfront commission payments are unfounded, and that commission structures do not need to change.

Partners Life is in the process of building a body of evidence to show that the upfront commission structure doesn't compromise the advice given.

The FMA says it remains concerned about high upfront commissions being paid to advisers.

Easier legal declarations

The Oaths and Declarations Act has been temporarily changed to make it easier for people to sign documents while remaining physically separated from each other under Covid-19 restrictions.

The New Zealand Government amended the Act to allow oaths, affirmations and declarations to be taken via phone or video link.

Law firm MinterEllison says the change removes the difficulties entities have faced while taking statutory declarations during the lockdown period.

Vulnerable clients

Compliance firm Strategi Group says worries over COVID-19 and reduced household income may cause some people to feel vulnerable and make poor financial decisions.

The company's Managing Director, David Greenslade, says the Financial Markets Conduct Act includes statutory duties for people who give regulated financial advice, including complying with the standards of ethical behaviour, conduct, and client care.

He says issues advisers need to be aware of include; communication difficulties, mental disabilities or impairments; health issues, and challenging personal circumstances.

Level 3 workplace guidance

The FMA has released its guidance for financial service companies operating under the government’s alert level 3 restrictions.

The regulator says businesses and staff who can operate from home must continue to do so.

However, it says workplaces can reopen if the work cannot be done from home, and the workplace can operate consistently within public health guidance and ensure the appropriate protections for staff and customers.

Legal webinar

A webinar to be held today Wednesday April 29 at 10am will cover off a range of legal issues and relief measures for adviser businesses operating in a COVID-19 world.

Hosted by Katrina Shanks of Financial Advice NZ, the webinar will feature three lawyers from Dentons Kensington Swan talking about wage subsidies, restructuring and insolvency, and commercial property.

New CEO for Accuro Health

Accuro Health Insurance has appointed Lance Walker as its new CEO. He will join the firm in June when he leaves the Wellington Regional Economic Development Agency where he has been CEO for the past two years.

His previous senior roles include Chief Executive of both Cigna Life Insurance and Fly Buys company, Loyalty NZ.

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The COVID-19 lockdown has forced the hand of some financial advisers to adopt systems so clients can sign agreements using their computer, tablet or smartphone.

Dean Logan, Managing Director at Logan Smythe in Christchurch, says a sudden event such as the lockdown means you either stand still and do nothing, or embrace change.

Look for our story – Digital Signatures Save Time and Money – at RiskInfoNZ to see how two advisers are getting business done without face-to-face meetings.

Commercial

New Zealand will move from Level 4 lockdown to level 3 at midnight on Monday 27 April. However, restrictions on freedom to travel, physical distancing, and trading, will continue.

Prime Minister Jacinda Ardern says Level 3 will continue for two weeks, during which time people must work from home if they can.

Bernard McCrae, Chairman of Newpark Financial Services, predicts that advisers will have to rely on video conferencing to speak with colleagues and clients.

Talking of which...The onset of the level 4 lockdown in New Zealand almost 4 weeks ago forced many advisers to find new ways to hold meetings with colleagues and clients.

Video conferencing platforms came to fore, but how easy are financial advisers finding them to use?

According to our latest RiskInfoNZ poll; 45% of you have adopted it 'quite easily'; 41% are 'learning fast'; 9% say it's 'not easy'; and 5% are happy to stick with the telephone.

The Financial Services Council is holding a follow-up to its Get in Shape roadshow – held in February - with a webinar on Monday 27 April. The FSC's Richard Klipin will talk about changes to the government's regulatory agenda which was disrupted by COVID-19.

If you want to find out what's in-store for New Zealand's economy then Financial Advice is hosting a webinar today - Wednesday 22 April – at 10am with economist Cameron Bagrie. He’s worked as an economist at the National Bank, Treasury and Statistics New Zealand.

Global credit rating agency AM Best has affirmed Partners Life’s financial strength rating as A- (excellent) and its long-term issuer credit rating of A-. The outlook of both these credit ratings is stable, says Partners Life.

That's it for this week, keep up to date at RiskInfoNZ.co.nz and subscribe to this podcast wherever you get your podcasts.

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Government-backed Loans

Financial advisers looking for support from the banks to keep their businesses afloat during the lockdown are discovering the government-backed scheme is not quite as easy as it first seemed.

While the government has agreed to guarantee 80% of any COVID-19-related bank loan to business owners, the remaining 20% of the loan has to be guaranteed by the borrower – and that could involve putting their home or some other asset on the line.

Katrina Shanks, CEO of Financial Advice NZ, is sure many financial advisers will apply for a government-backed loan, but agrees there has been some confusion over the ease in obtaining one.

She says that while some business owners thought they had access to these funds more easily than a normal process, the fact is that banks have to apply their normal checks and balances.

More news in a moment...

This Week's Poll

It seems a lifetime ago that we were able to have a business meeting over a cup of coffee, visit a client at home, or a colleague at their office.

In this week's poll risk info nz is asking if using video to hold meetings is working for you.

Cast your vote today.

$50M Customer Credit

Southern Cross Health Society is to return $50m to its members and business customers as a result of the coronavirus pandemic.

The CEO of Southern Cross Health Society, Nick Astwick, says the society is essentially owned by its members and so wants to support them.

The plan will see a credit awarded to each member based on a percentage of their policy’s premium.

Asteron Offers Help

Suncorp New Zealand is supporting Asteron Life insurance customers experiencing financial hardship as a result of COVID-19.

Suncorp New Zealand CEO Paul Smeaton says the economic effects of the pandemic are likely to be felt by customers and New Zealand businesses for some time to come.

He says the first step toward support lies in customers speaking to their broker or financial adviser.

Australia

Consumers in Australia are looking to their financial service providers for reassurance during the COVID-19 outbreak, according to research from MetLife.

The insurer says its COVID-19 Insights research shows that superannuation fund members and investment holders want reassurance that their funds are able to navigate this period of volatility.

According to its research, 58 percent of people surveyed say COVID-19 has already directly impacted their financial situation.

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The Financial Markets Authority has warned a financial adviser for making misleading claims in news-style advertorials about needing private medical insurance for the treatment and testing of COVID-19 in New Zealand.

The advertorials failed to mention that emergency treatment and testing for the virus is free.

The FMA told the adviser to take down the posts which appeared on Chinese-language social media platform WeChat.

Liam Mason, the FMA's director of regulation says advisers need to remember their fair-dealing obligations under the Financial Markets Conduct Act which prohibit misleading or deceptive conduct, including false or misleading advertisements.

Webinars

The Financial Services Council is holding a series of webinars for financial advisers – there's one today Wednesday 8 April at 3.30pm where the FSC's Richard Klipin will host a Q&A session with advisers.

And there's another on Thursday 9 April at 10am featuring guest speakers from communications firm Sherson Willis.

The FSC says its 30-minute ‘Ted Talk’ style sessions are designed to give advisers a break, join with friends and colleagues, and connect with the FA community.

CoronaCrisis

This week RiskinfoNZ canvassed the country's leading retail insurers around two key underwriting and product issues associated with the Coronavirus crisis.

We asked how how they are taking the pandemic into account when it comes to new life insurance policy applications and what measures each have implemented with regard premium wavers.

Premium Holiday

Southern Cross Health Society, which has 870,000 members, is offering premium payment holidays to help members who have lost their income as a result of the country-wide level 4 lockdown. While members can put their policies on hold for up to six months, they will be unable to make a claim.

And health insurer Nib is also offering its members a premium payment holiday for up to six months, during which time their health insurance will be suspended.

Forward Planning

Business mentor and financial adviser Tony Vidler says advisers need to do two things to get through the current economic downturn; take a hard look at their financial outgoings and keep supporting their clients.

He says now's the time to clear out the clutter and prepare to rebuild your business.

Fidelity Life

The launch of the health & wellness Sharecare app from Fidelity Life has been delayed by 10 days so it can be updated to reflect the COVID-19 situation, says the insurer.

It was due to be released to advisers for a test run on 6 April but that has been moved out to 16 April. The app will still be available to consumers as planned in early June.

Feeling positive

Despite the vast majority of people in New Zealand being in lockdown due to COVID-19, the business sentiment among financial advisers is resoundingly positive according to the latest RiskInfoNZ poll.

Last week we asked if your advice business will be viable once the virus crisis is behind us. Financial advisers in New Zealand responded positively with 75% saying their business would be viable. In Australia the figure is 48%.

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