As New Zealand continues operating under Covid-19 Level 1, it seems an air of cautious optimism is percolating among financial advisers as they start to put the near total shutdown of the country behind them.
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.
“Depending on the structure of your business determined how significant the impact of the lockdown was,” she says. “We know for many insurance advisers the ability to place new business was extremely difficult, and for those with a relatively new business – which is more reliant on an up-front commission structure – then it was especially difficult.”
However, Shanks says there are signs the sector is bouncing back.
“It is quite buoyant in some areas,” she says. “For many advisers they are extremely busy with both new and existing clients who have considered the need for new and/or additional insurance during this period.”
Her take on the general mood of the sector nationwide is that advisers are quietly confident, but have an underlying level of uncertainty.
For the most part, she says, advisers are “…just getting on and doing what they do best”.
Adrian Riminton, joint acting CEO and Chief Distribution Officer at Fidelity Life says the lockdown unquestionably had an impact on advisers’ businesses. A survey conducted by the insurer and released in June showed that 85% of financial advisers it spoke with had experienced a decline in revenue.
Business inflows have returned to near pre-lockdown levels…
Riminton says: “However, advisers’ positive outlook and resilience came through strongly, with 94% expressing confidence in their ability to get through these uncertain times.
“Business inflows have returned to near pre-lockdown levels. We think there’s good reason to be optimistic about things moving forwards.”
Kris Ballantyne, Chief Marketing Officer at Partners Life, believes there are still concerns about the impact of Covid-19 on the business and SME markets, and is conscious of how this will affect new business opportunities as well as ongoing affordability for existing clients.
He says: “Depending on decisions regarding ongoing government support, there is still a likelihood of more pain being felt by both employers and employees.”
However, Ballantyne says that with the country getting closer to “business-as-usual”, advisers have been able to concentrate on their business.
He sums up the general sentiment of financial advisers as being one of “nervous optimism” and says the “…rebound is well underway” when it comes to his view of the sector overall.
“We have seen many, or most, advice businesses returning to focus on new business opportunities,” he says.
“This is also true of insurers, who have predominantly re-focused from short-term retention and supporting Covid-19-impacted clients to focusing on both new business and ongoing servicing of all clients.”
We have seen many, or most, advice businesses returning to focus on new business opportunities…
Gail Costa, CEO at Cigna New Zealand, says feedback the company has received from the financial advice community paints a mixed picture.
“Some advisers have been as busy as ever, for others it’s been a quiet period,” she says. “One thing we’ve heard consistently is that the servicing of existing clients has been a particular focus for advisers.”
As for financial advisers, Costa says their confidence levels vary depending on factors such as business models, market, and client mix.
The new normal requires new thinking and doing…
“What we’re hearing consistently from advisers is that the ability to adapt to change, embrace technology and understand the changing needs of New Zealanders is key to ensuring business longevity and good customer outcomes,” she says.
Costa says while New Zealand is in a good position to deal with the effects of Covid-19, many families and businesses are beginning to feel the financial uncertainty that comes from such a once-in-a-lifetime situation.
“As a result, enquiries from New Zealanders into the protection of their families and businesses have increased substantially,” she says.
However, Costa believes it’s time for the industry to collaborate and look at how it can provide further solutions to customers in a post-Covid-19 world.
“The new normal requires new thinking and doing, to ensure new and existing customers have access to a full suite of relevant products to meet their changing circumstances,” she says.
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