Last week we published a slide show on the reasons why adviser businesses often struggle to grow. It turned out to generate a lot of interest online and has been viewed quite a few times by Twitter and Slideshare users. In case you missed it, here it is.
Just a reminder that we are out and about next week. Quotemonster is now two years old and is now the number one place to go for pricing and research. We are thrilled with this response and are committed to continuing to be your first choice.
As part of this we are holding another round of road shows in Auckland, Wellington and Christchurch. Ideal for you to attend if you are new to Quotemonster or if you are an old hand but want to learn about what’s new.
- New Research tools (Business, IP Claims, Insurer Selector, Funeral Plan and Head to Head)
- Policy Document Library
- New poster - Why You Need Insurance: The Financial Facts
- New quote options and products
- Tips and tricks
- The latest news on more than a dozen price and product changes since you last joined us
As always these sessions will be jam-packed full of good ideas and something to take away with you.
Click on the links below to register:
Auckland - North 28 October 2014
Auckland - Central 28 October 2014
Wellington 30 October 2014
Lower Hutt 30 October 2014
Christchurch 31 October 2014
Quotemonster is now quoting the pricing for Income Protection to Age 70 benefit period for those providers who offer it. When quoting Income Protection insurance you can select it in the list under the 'Benefit Period' the drop down box.
One UK insurance sales business has created a storm by placing a "financial adviser" in an exhibit with dinosaurs. But they are wrong; it seems hard to argue that the role of advisers will shrink: rising complexity and legal requirements appear to be entrenching advisers, not eliminating them.
Regular readers will know that I am a supporter of online services, and see direct sales as a valid way to buy many, many, products - but I am a committed supporter of advice and advisers. I am also closely involved in Quotemonster, where we say "It's no dinosaur."
I was asked about this recently by a journalist. I pointed out that although many people get their first insurance policy from a bank, virtually no financial advisers would sell a policy as limited as most direct plans are to a client. Clients will get a better policy in almost all situations from a financial adviser. The one they bought direct was okay, probably fit for purpose, and much better than nothing, but can usually be substantially improved on. Advisers do that.
Also, around the world, advisers are being legislated into the financial lives of millions. Here in New Zealand only an AFA can provide personalised advice on KiwiSaver, for example, and is on record as saying it wants the involvement of advisers in complex financial decisions.
Add to that the world of online comparison is coming under increasing regulatory scrutiny, and it looks like the distribution model for the future simply is not binary where one channel wins and another loses. The world is more complex. Different groups of clients will continue to want different services depending on their situation, ability to pay, and the regulatory structures applied to different kinds of products / advice processes.
I was glad to see a positive story about the FMA relationship with financial advisers. Although there must be a certain tenor to the relationship between a regulator and industry, it would be nice to think that it can have more of a community constable than a 'dawn raid' feeling to it. This piece suggests the former.
One thought to bear in mind, however, is that it suggests the FMA has a view of what financial advisers do that is somewhat different from what most financial advisers actually do. The example of explaining risks and advantages of more complex investments is telling. It is telling for what it is, and what it is not. It is not about the many products that are sold before clients become wealthy. It was specifically about investment risk. Link.
Our CEO Alan Rafe recently traveled the country with the IFA to present 'Risk: Compare, Comply - with Technical Help!' Click here to view his presentation.
The Consumer Affairs web page on financial advisers was probably written by a lawyer. The definition of what RFAs can advise on is technically correct, but incomplete, in such a way as to be completely misleading - something of a failing for a page designed for consumers.
The problem lies in the technical definition of what "life insurance policies" are. The definition was written in a time when most life insurance policies had a cash value and were therefore the set was defined first as securities with exemptions for the sub-set now commonly known as rate-for-age or yearly renewable contracts. Today these are overwhelmingly what are sold, and RFAs can give advice on them, but that is something the average consumer could not even guess by reading the Consumer Affairs web page.
Recently, over at goodreturns, there has been quite a bit written about the terms used for financial advisers. The story quoting Dr. Michael Naylor is at this link, and the weekly wrap-up from Philip Macalister is at this link. (Disclosure: Philip Macalister is my editor at goodreturns and owns the company that publishes Asset, a magazine I write for).
A few things struck me as I read the articles and comments:
The comments were revealing - if only for the widespread unhappiness with the current labels. Whether AFA, RFA or QFEA everyone seems to agree that the labels do little to help consumers understand the service that they are about to receive.
There is broad support for use of a term like "restricted adviser." But I am worried that there might not be such support if more careful thought was given to the criteria that might be used to determine whether an adviser is restricted or not.
For example, here is the critical part of the definition of what a 'restricted' adviser is from the Financial Conduct Authority in the UK: A restricted adviser or firm can only recommend certain products, product providers, or both.
You can read the balance of the detail at this link. But it seems clear that while a lot of non-bank, non-QFE advisers are keen on the idea that someone else should need to clearly state they are 'restricted' they are probably labouring under the assumption that the label would not apply to them, yet it may well do so. It depends, critically, on how the definition above is applied in detail.
Today the Reserve Bank has released a video explaining the functions of money and the Reserve Bank's role in producing and protecting it. The 'What is Money' animated video is four minutes long and has arrived just in time for Money Week. You can find it here over on the RBNZ website.
Money Week starts on the 13th of October. The goal of raising financial literacy is a great one. I am sorry that once again it looks like there will be limited involvement from financial advisers. This cannot be solely the fault of financial advisers - so I would encourage you, whether you work at an insurer, advisory business, or just have an interest, to investigate money week. Link.