Podcast News Wrap for 20 May 2020
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.
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, 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 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.
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.