Financial Advice New Zealand appoints new CEO

The Board of Financial Advice New Zealand has announced the appointment of Nick Hakes as Chief Executive Officer of Financial Advice New Zealand. From the release by the board:

“Nick relocates from Singapore, where he has been the Director of Market Development Asia at Kaplan Professional. Prior to this, Nick was General Manager, Member Services, Partnerships and Campus AFA at the Financial Advice Association Australia (AFA) in Sydney. 

Nick has held Director and Chair positions on the Board of Pro Bono Financial Advice Network, an industry-wide collaboration that connects financial advisers willing to provide pro bono financial advice with people facing personal health crisis. Nick has also served as the Vice Chair on the International Certification & Standards Board, a standing committee of the Asia Pacific Financial Services Association (APFinSA) that governs the professional certifications and education pathways of its professional adviser designations throughout the region.

I am sure you will all join me in welcoming Nick Hakes to our membership organisation. We are all looking forward to working with Nick and excited about the experience and energy he brings to the organisation. Nick understands the value of the collective voice of financial advisers and brings a wealth of international experience and expertise within the wealth management and financial advice industry, with an extensive background in building strategic partnerships, adviser-focused professional development frameworks, and membership growth for professional adviser bodies.

Nick will commence the role on Monday 26 February 2024. You will have the opportunity to meet Nick at the THRIVE Conference 2024.

Three of the Quotemonster team will be at the Financial Advice New Zealand annual conference, If you haven't booked, do get along, we would like to see you there. The conference is held in Wellington this year on 5 & 6 March. You can find more details about the conference here.

AI and Machine Learning are driving benefits and reducing headcount in the insurance sector

A survey of insurers by Rackspace has found that the implementation of Artificial Intelligence (AI) and machine learning (ML) technologies are driving benefits and enabling the reduction of headcounts.

The survey found over the past 12 months 62% of insurers had cut staff numbers due to the implementation of AI and ML. They found that the new technology enabled low-level analyst work to be completed by AI and ML. 52% of respondents said they had already realised substantial benefits from AI/ML, with a further 23% seeing modest benefits. 25% of respondents said it was too early to tell.

The benefits insurers listed from implementing AI/ML were

• 81% risk reduction, increased understanding of business/customers

• 79% increased sales

• 77% personalised marketing

• 75% increased productivity

• 73% increased revenue streams, operation cost reduction

• 69% improved customer satisfaction

• 67% faster time to profitability, reduced cost of new product development, ability to hire/recruit new talent

• 65% increased innovation

There are still some issues with AI, with 42% only ‘slightly trusting’ AI/ML results compared to 28% ‘strongly trusting’ results.

Talent and skill shortages were seen by 67% as the greatest challenge to further adoption of the technology; however 90% of insurers had grown their AI and ML workforce in the past 12 months.

Although this survey lumps AI and ML together there are some fundamental differences. Machine learning can be disconnected from the large volumes of training data that are used in generative AI such as Chat GPT. Although that may sound like a disadvantage, narrower pools of training data can make results from machine learning applications much more accurate for highly specific tasks. It also means that data does not have to be shared with generative AI engines – its can remain in confidential silos within the business.

ChatGPT recently put forward it’s arguments for how it can positively impact the insurance industry. While there are still plenty of cons to using ChatGPT right now, ranging from inbuilt biases and prejudices to its failure to comprehend nuance such as sarcasm, some insurance executives believe the underlying technology could be used as a starting point to build on and to jumpstart innovations in the sector.

At Quality Product Research Limited we agree that there are some great opportunities for implementation of AI and ML initiatives. With more than 15 million quotes and over 1.25million data points of data in our research databases we are well positioned to employ these tools to greater effect over the coming years.

Quality Product Research: Southern Research Advisory Board

In the last quarter of the year, we had our Research Advisory Board meeting with our Southern Representatives. We came away with tons of valuable feedback to implement in our research ratings on Quotemonster.

Independent Chair: Tony Dench

Southern Research Advisory Board members: Travis Hamilton, Jeremy Bernstein, and Wilhelmina Eveleens

Insurer Observers: Karl Sievwright (Southern Cross), Emma Wise (AIA)

QPR Representatives: Russell Hutchinson, Aneel Ravji and Doreen Dutt

The research advisory board reviewed the following topics:

·         The proposed rating changes for the non-surgical benefit. An important subject, this discussion resulted in adjustments following the Southern Cross changes to their contract and our reweighting the feature, and others to reflect the change in claims profile for this benefit.   

·         Revised Income and Mortgage Protection Claims Model, this resulted in a range of scenarios and details that will be included in our newest claims model.

·         A handful of research reviews we have accumulated based on adviser feedback, such as, the additional of Cerebral Aneurysm, optional items included in our extras or premier Income and Mortgage Protection options, and sharing on which products should be prioritised in our legacy research.

The feedback from our Research Advisory Board meetings has overall been very valuable to our Research team and allows us to strengthen our research ratings when we gain an insight into the adviser perspective.

We look forward to our meetings in 2024!

For more information on our Research Advisory board please click here.

Demystifying Advicemonster [online training session]

Our first Advicemonster training session for 2024 has been scheduled!

Take your Statement of Advice (SOA) to the next level and join us on Wednesday, 17 January 2024 11:30 am-12:30 pm

In this session, we have an in-depth walk-through of our Statement of Advice service and how you can create a professional and comprehensive SOA. Be the first to learn about our recent enhancements and ongoing developments from our new AdviceTech Lead, Aneel Ravji. Our Needs analysis and SOA tools are exclusive to the Advicemonster subscription and due to the advanced nature of the product, training can take between 60-90 minutes. This session is great to attend for those considering upgrading their subscription, or if you have already upgraded but would like to learn how to get the most out of it.

If you would like to register, please send us an email on aneel.ravji@qpresearch.co.nz

We look forward to seeing you there! 

FSC produce a Retirement Planning Guide

The Financial Services Council (FSC) have produced a Retirement Planning Guide which introduces people to some key retirement planning considerations.

The guide has a retirement planning overview, a ‘how to’ guide for Sorted tools and explains how to use the NZ Society of Actuaries’ rules of thumb.

The key considerations in retirement planning are how much you should save for retirement and what you can reasonably spend in retirement. The guide gives examples of matters within your control and variables outside your control which will impact on both of these considerations.

The Sorted tools that are particularly relevant are the KiwiSaver calculator and the Retirement calculator and the guide gives some tips on how to adjust these to reflect your situation.

The guide also explains the different rules of thumb developed by The New Zealand Society of Actuaries: 6% rule, inflated 4% rule, fixed date rule and life expectancy rule.

We think that the most valuable step you can take towards securing a good retirement is to get some advice. Although the DIY tools suggested in this guide can be useful in getting you thinking, this is a complex area in which an adviser adds real value. We suggest talking to a financial adviser with the right skills, experience and qualifications to help you set up a plan, monitor it and revise the plan when circumstances change.

Quotemonster Online Training (with tips and tricks)

Our first introduction to Quotemonster training session for 2024 has been scheduled!

Get a head start on the year and join us on Tuesday, 16 January 2024 11:00 am-12:00 pm.

In this session, hosted by Kelly, our National Partnerships Lead, we go over the basics of using Quotemonster and how to make the most of your Researchmonster subscription along with:

• How to generate a premium comparison between insurers

• How to set up your Product and Provider Settings screen 

• How to directly compare two insurers for replacement business (Head-to-Head) 

• How to download our detailed comparison and client-friendly benefit overview or heat map report

• How to add banks and non-adviser companies to your Research comparison

• How to find legacy policy documents

If you would like to register for this session please send us an email on info@quotemonster.co.nz

We look forward to seeing you there!

What do you want us to write about?

We’d love to find out what you’d like to read more of this year on the blog. Local industry news? Global insurance news? Health news? Insurtech? Let us know here.

Our top read stories since we switched to the new look Chatswood website were Swiss Re’s take on sustainability in life and health insurance, Fidelity Life’s product enhancements and Accuro and Unimed's announcement of their proposal to combine.

Annual diversity statement and gender pay gap reporting

As part of a commitment to fair treatment which we make to employees, customers, and clients, we conduct period assessment of where we stand from a diversity and gender pay gap standpoint.

From a diversity point of view we only publish high-level statements about the diverse nature of our team, in order to protect individual privacy. Of 14 staff we have five men and nine women. Any more specific breakdown as being a very small business we may end up disclosing personal information. We do, however, come from a wide-range of backgrounds - nine different countries of origin, as is fairly common in Auckland - we have an equally wide-range of cultural backgrounds. We aim to be a tolerant and inclusive organisation which allows us to draw strength from a wide range of skills, experiences, and perspectives. Our team includes people with deep technical skills and also those with great industry experience.

From a gender pay gap point of view, this report is as at the end of calendar year 2023, and covers all permanent staff currently present (i.e. excludes those on maternity leave and unpaid leave). We currently have a gender pay gap of 15% - meaning that the average of hourly rates including benefits for roles held by men exceeds the same average for roles held by women by 15%. It has been at parity and has also been the other way around. It bumps around a fair bit because, at our level of staffing, if non-executive roles shift from male to female it has had a big impact. On our governance board, and in our executive positions there is no gender pay gap.  There are an equal number of male and female members of our advisory board and governance board.

We’re back!

We hope you had a lovely break and got to enjoy some sunshine and had a chance to relax. The Chatswood and QPR team are back in the office and looking forward to everything we have planned this year. Although we are keeping some great new developments under wraps, we can drop some hints:

·         People with an interest in data and statements of advice for KiwiSaver and Home Loans should drop us a line

·         How do you check if a plan you have put together is reasonable? Ask us to put you in the beta test group for Checkmonster

Things already live that you may want to check out again now you’re back:

1.       Research: you should check out the stand-alone head to head comparison with access to more than 50 legacy products now rated and more joining them every week

2.       If you aren’t using Advicemonster to make your production of SOAs better, quicker, and more robust, then we’ve added more reasons to help you make up your mind

3.       Want to make sure your compliance is in good shape? Maybe add a copy of our outsource provider statement and information security bulletins to your compliance file

Hit us up with any questions you have. And if you have any thoughts on training you would find useful, please let us know here or here.

Are kiwis taking more sickies?

The 2023 Workplace Wellness Report, a collaboration between Southern Cross Health Society and BusinessNZ, found a rising trend in staff using more of their sick leave entitlements.

The survey canvassed 137 organisations in the public and private sectors, who together employ a total of 135,742 people, 6.57% of all employees in New Zealand, about their employee absence data across 2022.

In July 2021 the statutory sick leave entitlement increased from five to ten days annually. Across 2022 employees took an average of 5.5 days off. This increased from the 4.2 to 4.7 days recorded between 2012 and 2020. It should be noted that 2020’s average of 4.2 days was the lowest, when lockdowns, social distancing and a nationwide focus on staying home when sick had a significant impact on results.  

Extrapolating figures from the survey to the national workforce, it translates to 10 million working days lost due to employee absence in 2022, up significantly from 2021’s 7.3 million estimate. Across the economy this equates to around $2.86 billion in absence costs.

The report cited the ongoing influence of Covid-19 and the encouragement to stay home when ill as one of the factors influencing 2022’s increased absence results. They found 2022’s mean result for the degree staff typically turned up for work with some form of illness when they should have stayed home was less than in 2018, 2016, 2014, and 2012 and an exact match for 2020. This bodes well that employees are putting more emphasis on taking care of themselves and limiting the spread of illness. The report also found that the proportion of enterprises who thought the culture of their business encouraged employees to stay home when ill has improved markedly since Covid-19 arrived, throughout all sizes of businesses.

However, they also note that ‘paid sickness absence days being viewed as an entitlement by those suspected to be not actually sick’ as risen up the ranking of main drivers of absence to reach number 7.

Anecdotally, people have been experiencing more sickness since lockdowns ceased than in years previous. Could this be part to blame for the increase in absences? Or is it simply that one of the lingering effects of living through a pandemic is a reluctance to come in to work when sick, when in the past employees would have just soldiered on?